Expert: Toni Yates - 10/12/2007

Question
We had an issue with our realtor's performance and sent a certified letter to our broker documenting our issues with her.  The broker indicated that she would consider terminating the listing agreement if we paid the expenses associated with listing and advertising the house.  When we got the itemized "bill" it included services that were NOT performed.  It also included labor costs:  40.5 hours for the realtor, 20 hours for the secretary, etc.  We told the broker we would pay the "hard costs" for the signage, the advertising, and printing, but not the "soft costs" for labor.  She declined the offer.

At this point, should we submit the issue of the labor costs to arbitration?  We'd like to cite her for an ethics violation for including costs she did not incur. Our listing agreement expires in six weeks.  We brought this matter to the broker's attention two weeks ago.  Should we just "ride this one out" and let the agreement expire?  What are our risks in submitting this to arbitration?  It seems that if the arbiter finds in the broker's favor, then we would simply have to abide by the terms of the listing agreement if we did not want to pay the costs asked for by the broker.   Is this correct?  Would we do better to just file an ethics complaint AFTER the listing expires?  

Answer
Dear Dianne-
What a mess! I tell my clients when they list with me that they can cancel if they are unhappy with me as I certainly would not want to be in a "relationship" with someone who did not want to be in one with me- how uncomfortable! However, that being said, a listing agreement is a binding contract and they do have a right not to let you out of the contract, particularly if they have incurred substantial marketing costs. I think they are foolish not to let you go. I would contact the broker (by phone,if possible) and tell them you intend to contact their Realtor Association as well as their Licensing Board and file complaints (and perhaps even newspapers)if they do not compromise on a reasonable amount for a "cancellation penalty" and then do just that. You don't have to wait to file a complaint. You also do not have to accept offers from them unless they are full price and non-contingent. As I see it, you have NO risks in arbitration or the complaint process but they do. I'm sorry that this experience has left a bad taste regarding realtors but please keep in mind that  most of us want to do the right thing for our clients!  I believe from your comments that you have acted in good faith and wish you the best, Toni