Expert: liznarr - 1/14/2011

Question
I had my house up for sale with a realtor. They produced a buyer and we went under contract to sell it.  It went on for about two months or more waiting on the buyer to be able to close.  Also the two months we waited were prime time to sell a house. Anyway the deal fell though.  We continued to let them try and sell the house but no more deals.  Our contract was almost up so we asked them if we could be let out of the contract because paying two mortgages were killing us and we were going to try and maybe lease the house.  They said no problem..they understood and since we only had a couple of weeks left under contract they would let us out.  We had no look in finding someone to lease it.  Then the buyer who was under contract with the realtor to buy our house called us and ask if maybe we would sell it to her with us  financing it.  After seeking legal advice we sold it to her.  Now the realtor says we owe them commission.  Do we?

Answer
Hi Melynda,

Not having read your listing agreement and not knowing all the facts in your situation, I would suggest that you contact whomever you got legal advice from and ask this question.  I am not an attorney and cannot advise you as to legal matters, but I will give you some information below that should help you out.  If you feel that you might have gotten bad advice previously, I would contact a different attorney.

First, you should read your listing agreement carefully and determine the answers to the following questions:

1.   Was your listing agreement contract an Exclusive Right to Sell?  In other words, even if you sold the property yourself, were you obligated to pay the Real Estate Firm a commission?

2.   When you were “let out” of your listing agreement, was this in the form of a written document?  If so, it should have been an “unconditional” release, which would have terminated the listing agreement.

3.   Most listing agreements have a safety clause in them which is language stating that if a buyer who was introduced to the property by an agent during the period of the listing agreement purchases the property within “X” number of days after the expiration of the listing agreement, you would still be liable for a commission to the listing company.  In my area, an exception to this would be if you listed with another, different realty company after the expiration of the listing agreement and the house was sold through the “different” realty company.

If your listing agreement had a safety clause in it, did you sell within the period of the safety clause?

Based on the answers to the questions above, an attorney should be able to properly advise you.

Most real estate companies do not want the bad publicity associated with litigation and controversy over issues like yours.  Please get legal advice from an attorney who has read your listing agreement.  If you still have additional questions I might be able to help with at that point, feel free to write me again.

Regards,
Elizabeth