Expert: Dick Dennis - 6/30/2006

Question
We are co-owners of a rental property.  We wanted to sell the property and use our portion of the equity to start a business. The other owner doesn't need to sell, but needs cash out either by sale or borrowing on equity. We listed the property through a Realtor.  We were getting interest and even had an offer. Within 4 weeks the septic tank went out and we had to have it repaired. Understandably the buyer backed out. We took it off the market for about 30 days until the repair was complete.  It has been back on the market for almost 4 weeks without a single call, even though we lowered the price.  We don't know how much we would need to keep lowering to sell, but it looks like it might take awhile. Now, the other owner would like to just buy out our share and have us sign a quit claim deed so he can refinance and get cash out.  We would have our money and it would be a win-win.  Can we cancel our listing contract with our agent and allow the co-owner to buy us out or would we still have to pay the agent?

Answer
I suspect you already know the answer, Julie. Your listing no doubt gives you the answer: The Realtor has an exclusive right to sell listing. That means even if one of the owners sells the property, the Realtor is entitled to a commission. However, if the other owner buys you out and does not want to cancel the listing and ADVISES the Realtor what is being done, I don't think he/she would object.

I would recommend you sign a Warranty Deed to the other owner. That would require the other owner to sign, too. That is, you and the other owner deed the property to the other owner. It's much cleaner that way.

Or, if the other owner refinances the property at the same time you are giving him full title, then at the finish of the refinancing, he gets paid, you get paid and the title is in the name of the other owner.

I do wish you well.

Dick Dennis             dixiedee13@aol.com

www.OldProblemSolver.com