Expert: Dick Dennis - 5/24/2009

Question
I have signed Exclusive Exclusive Sale and Listing Agreement with an agent where it expires in 7 months.  However, the agent and I agreed to cancel the listing anytime upon request.  The term is I pay 6% commission with 3% going to the buyer's agent.

I have a question on #3 of Form 1A on the COMMISSION.  I'm trying to understand the legal wordings.  I understand after six months of expiration I will be liable for commission if I sell the property to an agent that showed my property during the contract.  My question is, is it 6 months after the expiration date or the cancellation date.  (If I cancel before the 7 months)

And the part where if a commission is paid to a member of MLS in conjunction with a sale, the amount of commission payable to broker shall be limited to the amount of commission which would have been payable pursuant to this Agreement less any commission so paid to another member of MLS.  What does this mean and why is this here?  Does this mean if I pay buyer's agent 5%, then I'm only liable to pay my agent only 1%?  

Answer
I am sure you meant Exclusive Authorization and Right To Sell, Debra. Most listing agreements are the same and you should be aware that ALL listing agreements tell you that commissions are negotiable. Also, all listing agreements stipulate (they usually leave a blank space where the agent fills in the amount of days after the listing expires) that should you sell the property to someone who was shown the property while it was listed with that agent, that agent is entitled to receive a commission . . . providing that agent gave you a written notice with the list names of people who inspected the property within five days after the expiration of the listing.

However, should you cancel the listing before the scheduled expiration date, you cannot sell the property to a person who inspected the property while you had it listed with that agent without paying a commission until the seven months expires. This is so, unless you had other arrangements. Any arrangements must be in writing. Never mind what was verbal to you. It must be in writing.

All of the above does not apply if you sign a new listing with another agent in that same MLS. Then you will only owe a commission to the new agent and any agent with whom he/she cooperates on a sale. Period. That last paragraph probably refers to: should you pay a commission of less than 6% to the new agent, the old agent would be entitled to receive the difference. I have never heard of this before. If you are signed up with a new broker/agent, you are signed up with that agent exclusively. Period. It is my belief that that last paragraph would never hold up in court. I do wish you well.

Dick Dennis