When we put our house on the market we hired an agent on a 4 month contract. At that time our agent had us sign a form stating that, for 90 days after the end of her agencies contract, we are required to pay her a full commission if we sold to a buyer that looked at our house during the contract period. I thought this was a requirement and just another form we need to sign.

Now I've heard that if after the contract ends and we do not renew with her company and we change the price of the house, we are no longer bound by that "not required by law" contract.

2 questions. A) should she have told us that this provision was not a requirement and B) is it true that we are not bound by this agreement once the terms of our sale have changed?

This agent was nothing more than what my friend in the industry calls a "listing monster". She tells makes you believe you can get more for your house than it's worth to suck you in, the only work she does is to get listings and then sits on them until they sell. She brought no clients and no agents noted that she recommended our property... we asked.

Now 6 months into our sale we are FSBO and we have lowered our price twice since the original listing. Now we have an offer from one of the first clients to look. We lowered our price based on not having to pay that commission. It's a $9800 commission that she did absolutely nothing for.

Up above, you describe the tail on the Contract as being for a 90 day time period; and that now, you're 6 months beyond the end of that Contract . . . . so it would appear that you answered your own question.

Regardless of whether certain clauses are required or not, your Contract is your Contract, and what you signed is what you (and your Agent) should be required to abide by. As long as those Clauses are not prohibited, and you signed them, then they apply.

Regardless of how you feel about your Agent, it does sound like she introduced your FSBO Buyer ("one of the first Clients to look") at the property; so you're both making out due to her efforts . . . . wouldn't you agree ?

[quote=Vermont]Up above, you describe the tail on the Contract as being for a 90 day time period; and that now, you're 6 months beyond the end of that Contract . . . . so it would appear that you answered your own question.

Regardless of whether certain clauses are required or not, your Contract is your Contract, and what you signed is what you (and your Agent) should be required to abide by. As long as those Clauses are not prohibited, and you signed them, then they apply.

Regardless of how you feel about your Agent, it does sound like she introduced your FSBO Buyer ("one of the first Clients to look") at the property; so you're both making out due to her efforts . . . . wouldn't you agree ? [/quote]


No, I wouldn't agree. What do you suppose she did to bring in that client? As far as I know, from talking to the buyers, they found the property on Zillo and had their agent set up the showing.

I said it's been 6 months total... 2 months have passed since the signing of the 4 month contract.

Regardless of your opinion, as an agent, on abiding by the contract, I'm asking about the legality and ethics.

Am I legally bound?
Am I morally bound to pay $9800 to someone who did nothing? The buyers are only interested now, 6 months later, because of the price drop. I feel that our former agent wasted 4 months of our time by not listing our property at a "real" value.

I just got off the phone with the legal department of the NC Real Estate Commission.

1) the agent/agency has 15 days from termination of the contract to send us the list of clients who came out for a showing. They never sent us the list.
2) We relisted our home which invalidates that provision.

Problem solved.

You previously described yourself as now being a FSBO.

Just the facts please! With this enlightenment, the previous answers would have been different.

Agent Commission Question - Holdover Clause

Locally: The Holdover Clause (sometimes called the "Overhold" clause) is a provision in the listing agreement that entitles the agent to earn commission for offers that are accepted by the seller during a specified period (90 days) after the listing agreement expires.

This is in order to justly compensates the agent for his or her efforts, by recognizing the fact that a buyer's decision-making process may be set in motion during the listing period because of the agent's marketing efforts, but may result in a formal off being made only after the listing period expired.

The standard form listing agreement contains a holdover clause entitling the agent to commission if an offer to buy the property is ACCEPTED by the seller within 90 days after the listing period expires, provided that the buyer was introduced to or shown the property during the listing period.

Other listing agreements contain a requirement that, for commission to be payable:

• if the sale is actually completed within the 90 - day holdover period; and/or
• if the agent has given the seller written notice within 10 days of the expiry of the listing agreement of all the persons to whom the agent has introduced the property.

There have been instances where buyers during the listing period have suggested to the seller, that they will buy the seller's property, but only after the listing period has expired and the seller reduces the price of the property by the amount of commission the seller will be saving.

When this happens, this is where the “Holdover Clause” becomes operational and in the event of litigation, the buyers who have no liability, freely admit that they learned of the availability of the subject property through the agents posted real estate sign on the property or by some other means and upon such admissions, it may be deemed that the agent's marketing efforts were either directly or indirectly instrumental in bringing about the sale of the seller’s property and entitled to the formerly agreed commission.

Important Notice: This information is provided as basic educational information by the author and is not a substitute for the advice of an expert and/or the advice of a lawyer. There is NO representation as to legality, accuracy, correctness of the herein information and the reader is strongly urged to consult a lawyer in the relevant jurisdiction to ensure accuracy before acting on this information.