Sometimes sellers hire a listing agent, who seems to offer all sorts of promises, but then things don’t really work out the way they said and the seller gets frustrated and wants out. The question is, “do they have the right to terminate the listing agreement and walk away from the contract in order to hire a different agent?
The short legal answer is no. The listing agreement is a mutually binding contract and neither party has the unilateral right to terminate. If there is simply a personality mismatch with the seller, the listing agreement allows the Designated Broker to appoint another sub-agent to represent the seller. Most sellers associate the agent as representing the whole company, so they usually don’t think that is a viable solution, even though most Designated/Managing Brokers may first suggest that as a remedy.
In most cases the listing broker has spent a good deal of time, effort and money before they ever really get the marketing campaign off the ground. Impatient and unrealistic sellers may not appreciate or recognize that fact before their attitude becomes soured and there is no convincing them to stay in the contract. With this in mind, it makes sense that the seller would be obligated to pay for those efforts and out of pocket expenses in order to be released from the contract. In those cases where the seller is not willing to make it right, the Designated Broker may only agree to terminate the agency but not the sellers continuing obligation to pay the costs associated with creating the listing or initiating marketing schemes.
The truth is that most Companies or Designated Brokers don’t want to work with clients who would be adversarial. My company policy has always been to offer a “no hassle” listing. In other words, if we can’t get along and it’s not working out, we release the listing. However, when the seller is terminating without cause or is not willing to allow us to first remedy their complaint, we release the listing agreement and agency obligation promptly, but probably would not release the seller from any obligation to compensate the agent.
The common sense solution to this dilemma when it occurs is for sellers to be fair in compensating agents for actual work and expenditures, and also for Designated Brokers to be quick to respond to grievances from sellers.