Expert: Todd C. Menard - 5/14/2009

Question
QUESTION: My Realtor's contract expired at the end of April and I have been extremely unhappy with her. If I chose to change Realtors at this time, would I owe her anything?  Could she charge me for her time, advertising, etc?

ANSWER: Hello Lisa - Under a typical exclusive buyer representation agreement once the contract expire's the exclusive representation services this specific agent provides would also expire. You would no longer be responsible under the terms of the contract. However, there is a term called 'Procuring Cause' which I have written about previously in my articles. If during the term of the contract with this agent this agent introduced you to a property that you ultimately end up purchasing, or at a builder where you ultimately end up purchasing, you 'may' owe a commission under the procuring cause definition. Black's Law Dictionary #5th Edition# defines "Procuring Cause" as: “The proximate cause; the cause originating a series of events which, without a break in their continuity, result in the accomplishment of the prime object.  The inducing cause; the direct or proximate cause.  Substantially synonymous with “efficient cause.” So if you end up purchasing a home that this specific agent had never shown you, then you would not owe this agent/brokerage anything in relation to the 'contract' which is expiring. One caveat - you must read the terms of that specific contract as representation agreements vary. Please remember that I am not a real estate attorney therefore this is not to be considered legal advice, rather, it is to be considered real estate information that any professional REALTOR should be able to provide. I hope this helps. - Todd

---------- FOLLOW-UP ----------

QUESTION: I should have been clearer, our problem is with the agent selling the house.  Her contract expired at the end of April and she has not made an attempt to get another contract signed, but still has our house listed on the website.  I will not sign another contract with her, could I owe her for anything she has done?

Answer
Hello Lisa - Listing Broker documents as required in Arizona by A.R.S. 32-2151 must include a beginning date and an ending date as well as an amount of compensation and signature of the parties to be a valid and enforceable document. The boilerplate of a listing representation agreement (contract)typically will indicate the listing brokers right to compensation for the service of representation ends at the expiration date indicated on the contract. Many times there will be a provision which states that after the expiration (but prior to you relisting the property with a different firm) you might still owe compensation to this broker should a buyer who was discovered during the term of the listing contract write an offer on the property. When this clause is included, there should be a date when this provision expires itself. Many contract will say 180 days after expiration. This is to protect the advertising and representation efforts of the listing broker and prevent the possibility that the seller and buyer may conspire to delay an offer until after a listing contract expires to provide financial relief to the seller or a better price to the buyer. If you relist with another firm during this period the boilerplate will typically include language that dissolves this provision should the property be relisted with another firm after expiration. Under this scenario should any buyer place an offer on the property the new listing broker will be the only firm you owe compensation to. Of course, this does not preclude actual verbiage in the contract you signed. So please read the contract for terms. In Arizona, this is what the AAR Exclusive Right to Sell/Rent indicates. If you plan to continue to market your home with another firm the answer to your question would be that you probably do not owe the old listing broker anything. Please remember I am not a real estate attorney and this is not to be construed as legal advice rather it is real estate information that any professional REALTOR should be able to provide. If you need further information please reply. - Todd