By Kay Wilson-Bolton
October 12, 2006
The common philosophy of homeowners is that if, “You can’t sell my home, I will find someone who can.”
There is nothing new about that statement, but what is new is the focus on a particular provision in our Exclusive Authorization and Right to Sell Agreement.
Most agents and owners think little of it during the listing process. It goes something like this. Let’s say Robert has the listing on your home and the listing contract expires.
This protection clause in the contract, (Paragraph 4. A. (2), means that if your home sells within a specified period of time, after the expiration of listing agreement, to someone who saw the house while Robert had the listing with either Robert or any cooperating broker, or submitted an offer on the property, Robert gets paid as long as he provides the seller with the names of these people, in writing, within three days of the listing expiration date.
The result could be that one of the excluded parties purchases the home within the specified time after listing expires. If that happens, the compensation reverts to the previous listing broker.
The names of the excluded parties must be identified in the Exclusive Authorization and Right to Sell Agreement with the new broker. If the names are provided on the fourth day, the exclusions do not apply. If they are not in writing, the owner is not required to acknowledge them.
While this provision has been in our contracts for a long term, they have been seldom used simply because the inventory was selling generally during the term of the first listing.
The untested portion of this provision is to whom is the offer presented. If the current listing agent receives the offer, there is little motivation for them to advocate the acceptance or create an environment in which it could be accepted if they will not be compensated.
However, if the first broker is responsible for the negotiations, and the relationship between him or her and the seller terminated on less than amiable grounds, it may be a challenge for the parties to work together.
As the market continues to transition to a more favorable climate for buyers, this provision will be receiving more attention. It deserves more discussion as properties get listed for either the first time with no buyer exclusion issues, or the second or third time, with exclusions noted.
It is most important that questions regarding the implementation of this provision be directed to your REALTOR®, office manager or broker. If there is no resolution, then consult an able attorney or legal counsel.
This is somewhat new ground. We must remember that the goal is to cause the home to be sold and compensate those who made it happen.
I am not the final word on this but comrades whom I trust support the general explanation.
The bottom line is to read what you sign and don’t sign until you understand. That goes for me too.
Kay Wilson-Bolton is the owner of CENTURY 21 Buena Vista. She brings a regional perspective to local issues and can be reached at 805.340.5025. Her website is www.readysetkay.com.