Charleston, SC Posts

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Cancellation fee

Well after a long and winding road with a ridiculous client, I had to cut ties and just walk away. I finally got the guy down on his price (my bad for not getting it down sooner) and we get 2 offers. We are $2000 off from where he wants to be on price.  He asks me and the buyers agent to take a reduced commission.  We both decline.  So he decides to withdraw his listing in a manipulative effort to say, fine, I guess you won't make any money then.  I hate to say it, but he's hurt himself more because I don't believe he'll be able to get a higher offer than our last one.  And I'm not going to starve by not having his business despite what he thinks about starving realtors in our market. 

So I learned a really important lesson that I have now integrated into ALL my listing agreements.  I've instituted a cancellation fee to compensate for my intial time, involvement and expenses in listing a property if the seller withdraws the listing prior to the agreement expiring. Our SCAR listing agreement does say something along the lines of the seller may be responsible for some marketing costs if the listing is withdrawn but it's quite nebulous.  My cancellation clause states that a seller will pay me $x if the listing is withdrawn prior to listing expiring or if property doesn't sell and seller declines an offer within 5% of listing price. 

I've had 2 listings since and neither seller batted an eye about it.  I guess it'll be another story to collect the cancellation fee, but I guess I'll cross that bridge when I get there.  Does anyone else have a cancellation clause? And if so, please tell me about it so I can strengthen mine.

Michele Reneau, ABR, GRI, CRS

www.CharlestonRelocationExperts.com

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Comment balloon 14 commentsMichele Reneau • April 26 2008 09:15PM

Comments

I'd be interested to see if you get it.  I was asked tonight if I charged for services rendered.  I do not, but I am starting to think about it.  Banks charge app fees and so on!
Posted by Dave Woodson, Not the Average Agent (Dave Woodson) almost 10 years ago

Some people are just difficult to work with.  I think you are right about this fellow regretting what he did.

 

Posted by Tiffany Wilson, SFR, First Time Home Buyers & Investors (eReal Estate Corp) almost 10 years ago

Don't have one, but am interested to see if anybody does and if they actually collect.

Linda

Posted by Linda Lipscomb, 731-695-1118, Lexington TN Homes (Linda Lipscomb RE/MAX Lexington Henderson County TN) almost 10 years ago

Happened to me 2 months ago, third offer 1600 less then asking price and it took my client 4 days to even get back to and to let me know that they will not even counter. They think I should cut commission and they also think they can get full price. You just have to know when it's enough my sign was down within two hours. My time is worth a lot of money!

Posted by Sonja Babic, New Bern NC, PRIME Realty NC, LLC (Sonja Babic/PRIME Realty NC, LLC) almost 10 years ago
I don't have one either, but it is a good idea.  I can't believe that man threw away the opportunity over 2K! I walked away from a listing recently and it was the best thing I have ever done.  Their house is still for sale 4 months later and still over priced!
Posted by Jennifer Bell (Keller Williams Realty) almost 10 years ago
Sounds like he was a real tough seller, $2000 should not be enough to kill a deal, Im sure he will regret it.
Posted by Bart Whitmore, Real Estate Agent (Keller Williams- Louisville) almost 10 years ago

I think it's also a good way to weed out sellers that may not be serious about selling.  If they are reluctant to pay $300-$500+ (depending on the price point of the listing) for potentially wasting my time, I figure, they will probably not be as motivated to sell or perhaps not value my time. And I'm tired of those kind of clients.

Posted by Michele Reneau, Realtor, GRI ~ Charleston, SC Relocation Experts Team (Certified Staging Professional (CSP) Elite Instructor) almost 10 years ago
Michele, I use the $x if the listing is withdrawn prior to listing expiring but now I'm going to add if seller declines an offer within 5% of listing price.  Thanks for the idea!
Posted by Lorrie Semler, REALTORĀ® in the Dallas area. Call/text 972-416-3417, Real Service. Real Results. Real Estate (United Real Estate) almost 10 years ago

Lorrie,

I also have been thinking about adding something if a seller declines x number of showings to that cancellation clause also.  Have you ever had any problems collecting?

Posted by Michele Reneau, Realtor, GRI ~ Charleston, SC Relocation Experts Team (Certified Staging Professional (CSP) Elite Instructor) almost 10 years ago
I agree that time is money, but to institute that fee is fairly brash.  I like it, but am anxious to see if it works for you.
Posted by Larry Bettag, Regional Vice-President (Larry Bettag - Cherry Creek Mortgage) almost 10 years ago
Michele, I haven't had anyone who cancelled the listing, so I don't know if there would be a problem collecting.   I did have one seller who had me change the listing to Temp off the Market after the first month, then eventually let the listing expire.  She accomplished the same thing as cancelling without actually cancelling. 
Posted by Lorrie Semler, REALTORĀ® in the Dallas area. Call/text 972-416-3417, Real Service. Real Results. Real Estate (United Real Estate) almost 10 years ago

Michele, I totally feel your pain...I finally decided this year to implement a $1000 cancellation fee should a Seller not reduce their price according to our agreed upon schedule of price modifications set at the listing time or if they withdraw their listing before the end of the listing period. As you said, none of my recent sellers have balked. Simply put, I find it hard to believe that serious sellers would have a problem with it and if they do, maybe we should't take the listing.

Posted by LaShawn Norden, REALTOR, (321) 377-0157, Your Real Estate Advocate in Central FL (Keller Williams Heritage Realty) almost 10 years ago

Do real estate agents charge buyers for cancelling their contracts?

I'm in California and as a first time buyer wanted to have this question answered before I seek out a realtor?

 

Posted by Luz De Leon over 8 years ago

Luz, You should ask your realtor of choice this question.  All realtors and companies have different policies.  Before I work with buyers, I interview them and discuss their readiness, willingness and ability to purchase.  If we both then agree to work with one another, then there is not a cancellation fee for a buyer if we decide the business relationship is not working out.  However, if you withdraw from a ratified contract, which is a legal document, you should consult an attorney as their may be financial or other ramifications. I would be happy to discuss this further with you and help you locate an agent in your area that does not charge a cancellation fee. Feel free to email or call me directly at 843-814-6680.

Posted by Michele Reneau, Realtor, GRI ~ Charleston, SC Relocation Experts Team (Certified Staging Professional (CSP) Elite Instructor) over 8 years ago

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