BIC TIP #1279: Terminated! Ending the Service vs. Ending the Agreement
Terminated! But what exactly got terminated? In this BIC TIP, Stephen Long explains a distinction every listing agent needs to understand: a seller can terminate your services, but that does not mean they can terminate the terms of the listing agreement.
Two Different Things Called “Termination”
When a seller says “I am done,” they usually mean they want the property off the market. They no longer want it advertised for sale, and they want you to stop working. The seller can absolutely do that.
But stopping the service is not the same thing as wiping out the contract. The listing agreement is a binding contract between the listing firm and the seller, and its terms do not simply vanish because the seller changed their mind.
The Firm Is a Party, Not Just the Agent
Remember who the contract is with. The listing agreement is between the firm and the seller. That means any remedies belong to the firm, and any decisions about pursuing them should involve your broker-in-charge.
The agreement does specify that in the event of a termination, the firm may require reimbursement of fees, costs, and expenses, along with other potential remedies.
Spell Out Early Termination in Writing
If you want something like an early termination fee, put it in the listing agreement. Stephen encourages listing agents to include it in the compensation section, so it is clear and disclosed exactly what you charge if a seller decides to end things early.
Clear terms on the front end prevent arguments on the back end. A seller who signs an agreement that plainly discloses an early termination fee cannot later claim they were surprised by it.
The Practical Takeaway
A seller can stop your marketing at any time, but the listing agreement still governs what happens next. Build your early termination terms into the compensation section, talk through them with the seller before they sign, and involve your broker-in-charge whenever a seller wants out.
If a contract dispute gets serious, the firm may want to consult a real estate attorney.
