Can you break a contract with a realtor?

Breaking a contract with a realtor is one of those undesirable but necessary decisions you must make sometimes.

It’s challenging to tell realtors you no longer need their services and end the relationship on good terms.

When you find yourself thinking “Can you break a contract with a realtor?”, you’re probably headed for a break-up and a search for a new agent.

But contracts are legal-binding agreements — you can’t just walk out of them.

That’s why we’ve put together some tips on how to fire your realtor while protecting your business interests.

What exactly is in a realtor contract?

Your business relationship with a realtor starts when you have a verbal agreement or sign a contract with them (on paper or eSignature).

In most cases, a contract gives the realtors the exclusive right to sell your house or to help you find a new one.

Aside from their marketing duties, a listing contract specifies the realtor’s fiduciary responsibilities.

These legal obligations compel real estate agents to act in your best interest until the agreement’s expiration date.

For instance, if you have multiple offers above the listing price for a property your business is selling, the realtor must help you get the best possible deal.

Fiduciary responsibilities can include:

1. Adherence

A contract mandates the realtor to do everything you request of them in their line of business as long as it doesn’t violate the law.

2. Loyalty

The real estate listing agreement also stipulates the agent must act only in the best interest of your business.

3. Disclosure

The realtor must relay all necessary information and policy regarding their firm, the offers they acknowledge for your property, and all other relevant information concerning the selling process.

4. Confidentiality

The realtor must hold your business data in utmost secrecy and never divulge it to anyone — not even potential buyers unless you consent to it.

5. Accounting

The realtor must account for all the financial transactions.

That includes the listing price, upfront payments, and eventual sale price.

Reasonable care and diligence

The contract mandates the realtor do their job properly.

They must inform you if they aren’t competent enough to take on any aspect of the job so you can avoid legal or financial damage.

Lastly, the agreement will include contractual specifics like its timeframe, listing duties, fees, charges, disclaimer, and other conditions you must adhere to.

Before terminating your real estate agent contract, you must know the provisions of your business contract with the realtor.

That’ll help you break the contract without breaching any agreement.

Reasons to fire a realtor

You must have convincing reasons before you can break a contract with a realtor.

You can fire your realtor as a buyer or seller on these grounds:

The realtor is incompetent and didn’t do their job correctly.
The real estate agent exhibited unprofessional or unpleasant behavior.
They can’t capitalize on new trends and technology to market your property. The NARS (National Association of Realtors) reported that 97% of home buyers search for homes online. You may part ways with a realtor who can’t utilize the internet to help you make an excellent sale.
They’re poor at negotiating.
They don’t abide by the Realtors’ Code of Ethics.
They breach any of their fiduciary duties.

How to get out of a contract with a realtor

Terminating your contract with a real estate agent differs according to your circumstances:

If you’re the buyer

You’ll have specific preferences, expectations, and limitations that guide your real estate transactions.

Your realtor must understand these factors and use them to find the perfect property for your business.

But if the realtor disregards your preferences or expectations, you can break the contract.

It’s easy if you only had a verbal purchase agreement with the agent. But if you signed a formal agreement with a buyer’s agent, you must abide by its conditions.

Breaking the contract here will require you to hold a contract breach negotiation with the real estate agent. You may involve your legal team if you can’t reach a resolution with the agent.

If you’re the seller

You’ll sign a legally-binding agreement with a realtor to get them to market your property.

Once bound by this contract, you can’t simply walk out if you lose interest in dealing with the listing agent.

The easiest way out is to sit down with the real estate brokerage the realtor works for and discuss breaking the agreement.

Many reputable brokerages who wish to keep a favorable relationship with your business will agree to peaceful contract termination.

Some other realtors may object to this arrangement because it’ll deprive them of their commission on the property sale.

The next step is to involve your legal team.

You’ll have a better case if the realtor’s conduct or fault warrants breaking the contract.

Otherwise, you may bargain a cut price on the commission to part ways with the realtor.

Or, you could pay a cancellation fee for the early termination of the agreement.

Finding a reputable real estate agent

Consider the following tips for finding an excellent listing agent.

Then, customize, negotiate, and eSign complex contracts with your preferred realtor using document automation software.

Ask for recommendations
Check Realtor.com for recommendations
Interview multiple realtors
Consider only real estate brokers with a verifiable online presence, preferably a website
Check the realtor’s online reviews and customer feedback.

Again, it helps to know what your contract with realtors will entail.

We recommend looking through real estate contract templates to know what they look like.

Forge a contract with the right realtor

Can you break a contract with a realtor?

Yes, but if you find the right one, you won’t need to. Look for a track record of smooth real estate transactions, certifications and membership of relevant professional bodies.

And when you do find one, use PandaDoc to eSign the contract and make it legally-binding.

PandaDoc helps you and your business partners sign documents faster.

Plus, end-to-end integration with various third-party apps equals convenient, precisely documented information on demand.

Try for free