How to determine the commission rate on a house sale if the listing agreement has expired?
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How to determine the commission rate on a house sale if the listing agreement has expired?
I have a house for sale in Puerto Rico. I have an agent selling it. The contract expired on 11/13/10, but he still insists he has a buyer for it. He sent me a contract where someone is buying the house. He’s done that before and the deals never went through; credit problems. If in fact, if this one does go through, since our contract expired what commission should I pay him? What was agreed to on the contract or the current perentage rate used in PR (5%)? I have told him several times that our contract expired and to turn the keys in but he insists he has a buyer. This is the 4th buyer.
Asked on February 2, 2011 under Real Estate Law, New Jersey
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
First, if the contract is expired, you do NOT have to accept any new buyers. If you choose to entertain a new buyer, technically it would be a new agreement; since good arguments can be made for the new agreement being either at the now-prevailing interest rate or--because of your course of dealing with this broker--at the rate you had been formerly contracted at, you should negotiate this and get something in writing before seeing the new buyer, to prevent dispute later. (i.e. there's no clear answer as to which rate would apply, so work it out before talking to the buyer.)
If this is a buyer who had viewed the house or been shown it previously, while you were under contract with the realtor, if you sell the house to him or her, it will at the then-in-force commission rate.
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
Listen, you need to set this guy straight or he is just going to continue to string you along. You need to send him a letter by registered or certified mail and advise him that the contract between you is not longer in effect as of November 13, 2010. That as of this date there is no viable purchaser for the property and that the contract that he has recently forwarded is sent without an agreement in place between you. That should you consider this potential buyer you will have to discuss a percentage rate for the commission for this particular deal as the prior rate of commission is no longer valid since the purchase contract was forwarded after the expiration of the agency contract. Now, you have to decide what you are going to do about the keys. You may need to change the locks. I don't trust this guy and I don't even know him. Is there a person in PR that you know and trust who could have the locks changed and get the keys from him (change them no matter what to protect yourself)? Then advise him of the party. Good luck to you.
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