Q: A friend of mine is looking to purchase a home and has signed a contract with a Realtor to help her in this process. I happen to be selling my home by owner (as a FSBO). My friend is very interested in my home and wants to know if there is any way to get out of the contract without penalties since there will not be another Realtor in the deal.
A: This sort of thing happens frequently in real estate. Buyers use real estate agents and sometimes even sign representation agreements. Your friend should look carefully at the agreement she signed.
How long does the agreement last? Is there an exit strategy outlined in the agreement (in case she decided to stop looking or change agents)? Is there a penalty stipulated in the agreement?
Once your friend fully understands the agreement she signed, she may want to go to her Realtor and discuss what has happened. Your friend will have the option of paying the Realtor the fee owed under the agreement, negotiating an amount that would be less than the amount required or waiting until the agreement expires and buying without the Realtor.
Depending on how much time the Realtor spent with your friend, the Realtor might be willing to change the original agreement. If she only spent a day or two with your friend helping her look for a house, she might be okay with a small fee. If not, then your friend should speak to an attorney for information about her options under the contract.
It’s far better to be upfront about this situation than to try and sneak behind the Realtor’s back. If you and your friend wind up doing a deal, please hire a real estate attorney who help you through the process, so that you’re sure to protect yourself and preserve your friendship.
March 5, 2009