When you sign a contract with a real estate agent to sell your home, it`s generally assumed that you`ll be working together until the property is sold. However, life can be unpredictable, and circumstances may arise that make it necessary for you to end your contract with your realtor before the agreed-upon timeline.
So, can you break your contract with a realtor? The answer is yes, but it`s important to understand the consequences and potential legal implications of doing so.
First and foremost, you should review your contract carefully to determine if there are any contingencies or clauses for cancellation. Many real estate contracts include a provision for “termination for cause,” which typically allows you to terminate the agreement if the realtor breaches their duties or fails to meet certain performance metrics. This could include not adequately marketing your property, failing to disclose important information, or engaging in unethical behavior.
If you are looking to cancel the contract for a reason beyond the realtor`s performance, you may still be able to do so with the mutual agreement of both parties. For example, if you suddenly need to move cross-country for a new job and cannot continue to work with your current realtor, you may be able to negotiate a cancellation without penalty.
However, there may be consequences to breaking a contract without a valid reason or mutual agreement. If your contract includes a “liquidated damages” clause, you may be required to pay a fee to the realtor for their time and expenses incurred in marketing your property. This fee is often a percentage of the agreed-upon commission, typically ranging from 1% to 3%.
Additionally, if you cancel the contract and then sell the property to someone who was introduced to it by the realtor, you may still owe a commission even if the realtor was not directly involved in the sale. This is known as the “procuring cause” doctrine, which states that the realtor who introduced the buyer to the property is entitled to a commission even if they were not the direct agent in the final sale.
In general, it`s best to communicate openly with your realtor if you are considering breaking your contract. Try to negotiate a mutual agreement that works for both parties, and make sure to review the terms of your contract carefully to understand any potential consequences. With clear communication and transparency, it may be possible to end the contract without any difficulties.