My Listing Expired, Now What?

Despite you and your listing agent’s best efforts, your home hasn’t sold. It’s been a handful of months and your real estate listing is about to expire.

So what do you do? Move on to another agent or sell the house on your own without paying your agent a commission?

Maybe not. You’ll need to take a closer look at your real estate listing contract first.

What is a real estate listing contract?

A real estate listing agreement is a legal contract between you (the homeowner and seller) and a real estate company who wants to help you sell your home for the best price. This listing contract is a legally binding agreement and gives the real estate agent the right to sell your home.

There are a few types of listing agreements, but the most common are:

1. Exclusive rights to sell the listing —?In this type of listing, the real estate agent is given rights to market the home, list the home on MLS, and receive a commission if they closes a sale within a certain time frame.
2. Exclusive agency listing —?This type of listing allows one real estate agent (or broker) to try to sell the home. You’ll also have the right to find a buyer on your own. If you do, the real estate agent would not receive a commission.
3. Open listing —?In an open listing, any real estate agent who brings you a buyer can score the commission. Plus, you still reserve the right to sell the property on your own if you find your own buyer.

?What are the terms of a listing agreement?

There are a few?key terms?you can expect in your listing agreement:

• The commission you’ll pay your agent
• Rights to sell (based on the type of listing agreement you chose)
• Duties and activities the agent is authorized to conduct on your behalf
• Representations (that you’re in a legal position to sell the property)
• Dispute resolution details
• The duration of the listing agreement
• Safety clause that protects the agent after the listing expires

Do you have to sign a listing agreement?

If you sell the home on your own or sell to a cash buyer, you don’t have to work with a real estate agent and therefore don’t have to sign a listing agreement. However, if you do work with an agent then you absolutely must sign a listing agreement.

What happens if your listing expires before a sale?

Technically, you have 3 options on how to proceed after your listing expires:

1. Draw up a new listing agreement with your agent
2. Find a new real estate agent to help sell your home
3. Sell the house yourself

The route you choose all depends on what terms were outlined in your contract.

We mentioned earlier that many real estate listings have a safety, or protection, clause. This is key in determining your next steps. This safety clause will determine whether or not your real estate agent will still get a commission on the sale of your property even after your contract has expired.?

Understanding the “safety clause” in a real estate listing

A safety clause outlines a commission protection period for the agent. This clause will lay out a certain number of months after the listing has expired during which the agent will still receive a commission in the event of a sale.

A safety clause prevents the agent from losing out on commission from a sale that they may have helped facilitate through their marketing, listing, and other work. It also prevents you (the seller) from terminating the contract once the agent has helped you find some interested buyers to avoid paying a commission.

The specific details of a safety clause—including length of time—will vary from contract to contract. Some might be 3 days others could be up to a year after the listing has expired!

Even without the safety agreement, if an agent can prove that their efforts resulted in the sale of the property (for instance, they gave the buyer entry to the property during the listing period), you might still be liable to pay a commission.

?So what should you do after your listing has expired?

Knowing that you might still be liable to pay a commission to your agent even after the listing agreement has expired, tread carefully.

First things first, make sure you know where you stand. Review your listing agreement and talk to your real estate agent. You probably did a similar review at the start of your contract, but now is a good time for a refresher.

If the safety clause is not checked on the listing agreement, then generally it does not apply. If it is checked and fully filled out, pay close attention to the terms and ask questions like…

• When does the protection agreement end?
• In what situations am I still obligated to pay?
• If I enter into a new agreement, am I still obligated to pay?

Your goal should be to fully understand the terms so you’re less likely to run afoul of them or your agent.

If you’re not bound to an agent commission, consider selling your home for cash

You’ve reviewed your listing agreement and talked with your agent. You’re not held to a safety clause (or the safety clause period has passed). Now what?

Obviously, your home is having a tough time on the market. So is it a mistake to go through the process all over again with a new agent?

If your home is in rough condition, in a poor location, or needs a lot of updating, listing it on the market again probably won’t make much of a difference. Your home will likely sell for a lower price than you want and you’ll still have to pay your new agent a percentage of the offer.

Instead of going through the hassle of listing your home all over again, many people choose to?sell their home quickly for cash to a real estate investor. There are no commissions or fees involved, it’s fast and easy, and you’ll get a competitive price.

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