Q: If a seller terminates a listing contract with his Realtor and the Realtor gives the seller a list of “protected buyers,” does this mean that anyone on the list cannot be on the title to the home without the paying the agent a commission?
We are purchasing a property with another couple and want all of us on the title. However two of us are on this “protected buyer” list, and it seems to be holding up our purchase.
A: When a listing contract ends, the listing broker wants to make sure the seller does not contact any of the people the listing broker showed the property to and deprive him of a commission.
So, most listing agreement contain a clause that states that the listing broker will still be owed a commission if the owner sells the home to any person who saw the property during the time it was listed.
To protect the owner and, perhaps, the broker, the listing broker can deliver a list of all of the prospective buyers that came to the property while it was listed. If any of these people buy the home during the months following the termination of the listing, the broker can make a claim for a commission. The time period after the listing expires in which the broker is protected by this clause can be short or can be as long as one year.
Obviously, you saw the property while it was listed and if you buy the property, the seller would owe a commission to the former listing broker — if it is still within the protected time period.
If the property is now listed with a new real estate agent, the seller may not owe a commission to the first broker. In some parts of the country, the real estate brokerage community has come to an understanding that when a listing is lost by one company but gained by another company, the first company will not make a duplicate claim for a brokerage commission.
If the home has not been relisted, then the former broker will want to be paid and should be paid. If it had not been for the work and listing of the property by the former listing broker, you probably would never have come to know of the house.
Because of this fact, the former listing broker would be entitled to payment.
Feb. 28, 2006.
If a realtor has not physically shown our property and the contract runs out, can she still add the name of someone she has spoken to about the property to the protected buyer list?
Barb:
It depends on how generous you want to be with her. If she hasn’t done her job, and isn’t showing the property, then you can simply say, “I’m sorry, but we’re not recognizing that person as an addition to the protected buyer list.”
Just wondering how you handled her non-showings before, however. If that ever happens again, don’t wait until the listing agreement runs out. Instead, you should set up an appointment with the managing broker and try to figure out what the problem is, why the agent isn’t doing what he or she said they’d do and how the problem should be addressed. At the end of the day, your listing agreement is with the brokerage firm, not with the individual agent, and the managing broker could sever that relationship and have a different agent in the business take it over who might be a better fit, or could even just terminate the listing agreement if you’re really upset. The last thing a smart managing broker will want is an unhappy customer who talks about what a terrible job the agent/real estate company is doing. That doesn’t lead to more listing or more sales.
These relationships don’t always work out. We wish they would, but trying to pad the protected buyer list isn’t a great way to go. You should call the managing broker of the firm and simply say, “We’re done.”
Let me know what happens.
Ilyce Glink, Publisher
ThinkGlink.com