Excluding parties from a listing agreement
Dear Phyllis,
My neighbor is a part-time real estate agent, and I hired him to sell my home. A different neighbor expressed interest in my home for his son. The agreement with my real estate agent was that if this neighbor’s son purchased my home, he would reduce his real estate fee to 4%. The neighbor’s son did make an offer after several weeks on the market.
My Realtor ran a couple of ads and had just one open house. I accepted the offer, and my agent opened escrow. When I received the escrow papers, the commission fee listed was 6%. I have argued with my agent, but he said that the discount expired because he held the home open and advertised. I tried to do my agent/neighbor a favor by letting him list my home and now I feel taken advantage of. As a result, I have not signed escrow papers yet. What do you suggest I do next? Christine M.
Dear Christine,
You signed a residential listing agreement which outlined commission, listing term, and exclusions. The agreement should have specified that if your neighbor’s son purchased the home as an excluded party, the commission would be reduced to 4%. It also should have clearly stated whether that reduced commission applied only for a specific period of time or remained in effect after the listing expired.
If the exclusion (of your neighbor’s son) was not noted in your listing agreement, you need to remind your neighbor/real estate agent of your verbal agreement. Have you done this yet? When did it supposedly expire? Were there events that triggered the expiration or a date?
What is the date of your listing agreement? When did the ads run, and when was the open house? Do you understand what period of time your agent agreed to reduce the commission?
If you are unable to resolve this issue with your neighbor/Realtor, please contact his manager for a meeting. Most reputable brokerages do not want negative publicity or unhappy clients. If you are not able to obtain satisfaction, consider seeking the advice of a real estate attorney.
