Thursday, October 24, 2013

How To Fire A Real Estate Agent

**Disclaimer: This post has stirred up a few people. I have run it by two other brokers and both agree there is no issue with it. This article is not intended to solicit business. It is for educational purposes only. In fact, if you are reading this article because you want to fire your agent, please DO NOT contact me to take their place. Please read another one of my blogs on questions you should ask your prospective agent and find someone else that you can work with. I wrote this article because I get asked the question and I am uncomfortable answering it on a specific basis. I would rather answer it in generalities and let you fill in your own blanks. 

Sooo, this one may not be a popular post with some of my Realtor friends but, if they are doing a great job, it shouldn't matter to them! On a rare occasion  someone will call me and say something to the effect of, "I have my house listed but my Realtor is terrible because... How do I get rid of them?" The specific reasons can vary but almost always include some element of bad communication, unrealistic expectations or a perception that the Realtor is ignoring or avoiding the client. This question presents an ethical conundrum for me. I am allowed to speak with someone else's client if they approach me first. It is gray area for me to tell them how to break their client contract, however, as this could definitely be interference in an agency agreement (more to come later on this). It is safe for me to say something like, "I can list your house for you only if you are no longer obligated by contract to your current Realtor." Anything beyond that is shaky ground and I will just refer you back to your agreement and an attorney.

Since I can't answer the question for you each time you ask it, I thought it would be wise to inform the consumer before they have a need for it. One disclaimer, the documents I am going to refer to are what are considered the "standard documents" in the state of TN. If your Realtor deviates from using the TAR (TN Association of Realtors) documents, I would tell you to speak with an attorney. The only documents or agreements I know a lot about are the ones I use (standard docs).

Let's start with a little discussion of agency in the state of TN.

When you sign a listing agreement or a buyer representation agreement (typically) in this state, you are almost always making a contract with the agency, not the individual Realtor. So, if you list your house "with me," you sign a document that says that Weichert Realtors, The Andrews Group has the exclusive right to market and sell your home. The document further stipulates that Weichert Realtors, The Andrews Group has designated me to be their representative in your contract with them. This is important because if I leave Weichert, my broker can (and many brokers do) retain the listing and reassign it to another agent within his or her firm. In other words, the contract is not really with the individual Realtor but instead with the company. In some cases, when an agent leaves, the broker will allow the agent to take his or her listings with them but they don't have to.

Next, the concept of agency is basically that of an advisor, advocate and representative. When you hire an agent, it is very similar to hiring an attorney. That agent is obligated to retain privileged information, to represent your best interest at all times without regard to his or her best interest and to give you sound advice and representation with the other parties you encounter. This brings up an interesting position when an agent wants to sell his or her own listing to someone they are working with as a buyer. If that agent tries to "represent" both parties, they are practicing "dual agency." Dual agency is legal in the state of TN but is certainly not advisable. Many individual brokerages do not allow their agents to do it. Instead, the advisable way to manage this situation is to retain one of the agency agreements and either refer the other party to another agent or to drop the agency agreement and just treat them as customers instead of clients. Essentially, you would not offer advice or "act in their best interest." Working as a facilitator does not mean lying, cheating or stealing as those are not acceptable at any time but you could not offer any advice or guidance--basically you are an order taker.

You should also know that all agency agreements in this state have a timeframe built in. In a listing agreement you say the property will be listed for 90 days, 180 days, 360 days, whatever. Once that listing has expired, there is no agency agreement in place (unless you made a new one). Same is true on a buyer representation agreement.

One concern that comes up sometimes-- just because an agent has showed you a house or two, you are NOT in an agency agreement with him or her. You are only in that agreement if you signed a buyer representation agreement. If I show you 20 houses and never get that buyer rep signed, you are not obligated (by law) to me. If, however, you signed the buyer rep and then went to another Realtor, you could have some major problems (and so could the other Realtor).

OK, so you have signed a representation agreement (buyer or listing, doesn't matter) and you are not happy with the service you are receiving, what should you do. The first advice I will give you is this--don't fire them. Remember you hired them for a reason. You liked something about them enough to trust them with helping you on a HUGE investment. So, don't fire them just because you had a disagreement. Don't fire them because they are not communicating with you the way you prefer if you've never discussed your preferences. Of course, if they are doing something unethical (check the REALTOR Code of Ethics here) or illegal (visit Tennessee Real Estate Commission here), that's a different story. Instead, do this first:

Number 1, tell your Realtor and give them a chance to fix it. Maybe they don't know what you expect, service wise. Tell them specific things to improve. Help them help you. Give them an opportunity to fix it. Maybe they will, maybe they won't. Either way, give them one more chance.

If they don't fix it, Number 2, contact their broker (if they are the managing broker, see if there is someone equal to them or higher than them in the organization). The broker is ultimately responsible for the agent. The broker is also ultimately responsible for you getting out of your contract or not. Contact the broker and tell them your gripes. Be calm, reasonable and have some sort of actual issue, not just "he stinks." Build your case. Most likely the broker is going to ask you to give the Realtor one more shot after the broker talks with the Realtor. If you have it in you, try to give them that chance too.

If all that fails and you just cannot get it worked out, and you want to part ways, you will need to contact the agent and likely the broker to be fully released from the agreement. It is important if you have a house listed that you say "fully released" because if you just say you want your listing pulled, you have not broken the listing agreement. You have only instructed them not to put it on the MLS. If someone else then puts it on the MLS and you sign that exclusive right to sell agreement, you have two agency agreements in place and that is a problem. In order to know you are fully released, you will have to have, in writing, with signatures from the agent and broker, that you are fully released from any obligations created by the listing (or buyer rep) agreement dated on whatever date. It is important to get the signature of the broker because, remember, the contract is the property of the agency, not the agent.

Remember also that they don't have to release you from what you obligated yourself to. Again, you liked something about them and you obligated yourself to them. Agents spend a ton of time and money getting a listing listed. Sometimes they are reluctant to release someone if they feel like they can sell the house.

I truly hope you never have to do this. I hope that any real estate agent you interact with is a true professional and treats you well. If you do run into one of the few bad apples, I hope this helps.

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