Legal Question in Real Estate Law in California

Re: change of heart

Your situation is not uncommon. Especially in this market. I have my Brokers license and my wife is also a Realtor.

From a legal prospective, your Residential Listing Agreement is a binding contract between you and your agent. If, for example, your agent procures a buyer for your property based upon the terms of the listing agreement, you are obligated to pay the agreed-upon broker compensation. Also, if you don't want to sell your house with your current agent, but are looking to list your home with a different agent, your intentions for breaching the contract become more complicated than if you simply chose to stay living where you are.

From a reasonable perspective, most agents, including my wife, would say that if a seller is no longer interested in selling their home, both parties can sign a California Association of Realtors form "COL" - Cancellation of Listing. And most agents SHOULD be willing to do this if your intentions are true and you are not planning on re-listing with a different agent.

My wife would rather have a good, continued future relationship with her clients, even if it means cancelling a current listing. In the real estate business, an agent's reputation is always on the line and most agents would rather avoid unnecessary contract disputes.

If you have more questions about your specific situation, don't hesitate to contact me (or my wife)!

Re: change of heart

Most real-estate listing agreements provide that the owner/seller is liable to the broker for the agreed commission when the broker procures a buyer who is "ready, willing and able" to buy the property on the listing terms. It is not necessary for escrow to close, nor is it even necessary for you to accept the offer, for the broker to earn the commission and be in a position to sue you for it. If you have aggressively priced your property well above today's sagging market (in most places, anyway), perhaps your chance of a "ready, willing and able" buyer being found are slim. However, paying 6% of your listing price for naught makes it very worth your while to beseech the broker to release you from the agreement. I believe most will do this, particularly if they have not already expended a lot of effort and money showing your house and preparing sales materials.

Re: change of heart

To answer your question properly, I would have to look at your listing agreement. For example, unlike exclusive right to sell or exclusive agency listings, an open listing may be revoked by the owner/seller at any time before the broker has procured a buyer, and this is so regardless of the time and expense incurred by the broker. (Tetrick v. Sloan (2nd Dist. 1959) 170 Cal.App.2d 540.)

In the situation set forth by Mr. Whipple, a seller who cancels with one broker, after the broker has obtained a ready willing buyer, would be forced to pay a reasonable commission.

I am assuming from your factual scenario that your broker has not obtained a buyer, and that you have had a change of heart as to selling your home, and are taking your home off the market altogether, not that you are attempting to cheat your broker out of a commission.

Very truly yours,