Legal Question in Real Estate Law in California

You have a right to cancel a listing agreement at any time, but if you've decided not to sell, the sooner the better. You also need to understand the potential ramifications of the cancellation.

1. Read the listing agreement. It likely provides that if the broker incurs costs before the cancellation, they are entitled to reimbursement. So if they have fronted the money to stage the property, or placed advertising orders that they will be charged for even if they cancel, you may owe for things like that. So, again, cancel as soon as you decide not to sell.

2. If you later sell with another broker within the period of the first listing agreement you may owe the original broker their commission anyway. So only cancel if you really don't want to sell, or know you won't try to sell again until after the listing agreement would have expired.

3. Even if you don't hire another agent, if you later sell and the buyer connected with you in any way via advertising or other efforts put in by the broker before you cancelled, you may still owe some or all of the commission in the listing agreement.

Bottom line: If you really are not going to sell. Tell the broker right away, read the contract to see if it calls for you to pay expenses, and if so get an itemization and negotiate reasonable payment. If you do all that, your exposure for cancelling will be minimal.