So, you're working with a real estate broker and it's just not working out. Should you dump her? Can you dump her? We asked brokers and lawyers for advice on how to handle this sticky situation. Here's are some of their most essential tips.
Buyers' brokers vs. sellers' brokers
Exclusive broker agreements typically exist between a seller and a broker. A contract is usually involved specifying the term of the agreement, which often ranges from three months to a year.
"Every agency has its own form," says Craig L. Price, a partner at the law firm Belkin Burden Wenig & Goldman. The key element of a seller/broker contract is that if the broker presents a buyer for a property, the broker gets a commission.
Buyers can choose to work with a certain broker or agency, but actual exclusive agreement contracts between buyers and brokers are rare.
What typically goes wrong
Why, exactly, would a seller want to dissolve a relationship with a broker? The obvious answer: a sale hasn't happened. More specifically, clients can grow dissatisfied with marketing efforts that they feel are not extensive enough, or not targeting the right audience, or they might become unhappy with the broker's style or frequency of communication. Stephen Dartley of The Keskinkaya Dartley team at Douglas Elliman says that sometimes clients sign with a broker only to see them vanish and outsource the project to another, more junior member of his team. Sellers obviously don't like this.
Get ahead of the problem
If you're stuck in a less-than-ideal relationship with a broker already, this piece of advice will be of cold comfort, but a bit of forethought can go a long way.
Find Your Next Home
"The best time to deal with situations like this is to head off the problem before you sign the agreement," says Toby Cohen, a lawyer with the firm Holm & O'Hara LLP.
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Relationships sour when expectations aren't met, and the best way to prevent that from happening is to be clear about what expectations are. If something is so important to you that you'll consider walking if it's not done, it should probably be specified.
"'We had an understanding' are famous last words," Cohen says.
Talk it over in person
Before you pull the plug, it's important to sit down with your broker and have an honest conversation in person about your issues.
"So much misunderstanding happens over text and email," says Maggie Regan, a broker at Citi Habitats.
"Talk to your broker. Have an honest conversation: 'You promised to do X. You haven't done X. I need you to step it up,'" Cohen says. "Hear them out before getting a lawyer involved."
Often simply clarifying what you need, and what your broker can provide, is all that's needed to get things back on track.
Breaking a contract
You're bound by the terms of your particular contract, the terms of which will of course vary from case to case. Price, the attorney, typically includes language in exclusive broker contracts for seller clients that says that either party can terminate the agreement with 30 days notice at any point, which lays the foundation for a clean and quick exit should you need it. He reports that most brokers are fine with this, so long as there's also the condition that at least 90 days pass before that option can be exercised, due to what it costs to start marketing a place.
That doesn't necessarily mean you're stuck in a contract if your agreement doesn't include that clause. If both you and the broker agree it's not working out, it may be just as simple as agreeing that's the case and terminating the relationship.
"Parties are free to modify or cancel an agreement as long as both parties agree," Cohen says.
"Sometimes the broker wants to break up with the seller," Dartley says.
No matter what the tenor of the dissolution of your agreement, be sure to get that in writing, so that you have formal proof the broker is no longer showing the apartment, and that she is not owed anything when and if it sells.
P.S.: You may still have to pay up
Even if you've moved on to a more harmonious relationship with another broker, your "ex" may still have claim to a commission. In the case of a relationship that is dissolved or a contract that expires, brokers submit a “protected pool of potential purchasers," a list of usually no more than six potential buyers. If one of those buyers signs a contract for the apartment or house within a set period, usually 90-180 days, that broker is entitled to a commission. The buyer just has to go into contract, not close on the apartment, for the broker to get this kind of commission.
And hey, if the broker helped sell your place, regardless of how you parted ways, she earned it.
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