Can You Cancel a Listing Contract in Real Estate?

Why you might cancel a listing contract:

There are several valid reasons why you might want to cancel your listing agreement with a real estate agent or brokerage. Here are some of the most common:

• Lack of communication: Your agent isn’t responsive, fails to provide updates, or leaves you feeling out of the loop. “That lack of clarity can be very frustrating for a seller and can lead them to want out of the agreement,” says Valdez.
• Poor marketing efforts: The home isn’t being promoted effectively, with limited online exposure, low-quality photos, or no open houses. “Sellers also get frustrated when they don’t see open houses being held or when there’s no visible marketing effort. They want to see that their agent is actively working to get their property sold,” echoes Valdez.
• Unrealistic pricing strategy: The agent encouraged a list price that’s too high or too low. “Most often, the issue is that the price is too high,” says Valdez. This can lead to your home sitting on the market without serious interest for an extended period of time.
• Personality or trust issues: You and your agent simply aren’t a good personality fit, or you no longer feel confident in their ability to represent you.
• Change in circumstances: Your plans may have changed — whether due to a job, finances, or personal reasons — and you no longer want to sell.

How to cancel a listing contract in real estate

If you’re considering canceling your listing agreement, here are the general steps to follow:

1. Review your contract: Look for any cancellation terms, including notice requirements, fees, or specific conditions you agreed to when signing.
2. Talk to your agent first: A direct conversation can go a long way. Many agents will agree to cancel the contract if you’re dissatisfied or your situation has changed.
3. Request a formal release in writing: Verbal statements aren’t enough to legally end the contract. Ask for written confirmation that your agreement is being terminated, and ensure that both you and your broker sign the document to avoid any confusion later on.
4. Check for post-cancellation clauses: Some contracts include a protection period that allows the agent to collect a commission if a buyer they originally introduced purchases the home after the agreement is canceled.
5. Address your financial obligations: Review whether you’ll be responsible for reimbursing any upfront marketing costs, cancellation fees, or commission protections outlined in the agreement.

When can you not terminate a listing agreement?

You may be unable to cancel a listing contract if the agreement doesn’t include an early termination clause or the agent/broker refuses to release you. Even with valid concerns, it’s possible that you could be obligated to stay until the contract’s expiration date. Additionally, it’s typically too late to cancel if your home is under contract with a buyer.

Always check the contract terms and consult with a real estate attorney if you’re unsure about your rights. “If you’re in a situation where you’re planning to cancel your agreement or sell the property after the contract has already been terminated, it’s a good idea to consult a real estate attorney,” suggests Valdez. “In most states, real estate attorneys can review the listing agreement to make sure your interests are protected.”

Are there fees to cancel a listing contract?

Some listing agreements include a cancellation fee, especially if the agent has already spent time and money marketing your home. These fees can vary, ranging from a few hundred dollars to reimbursement for specific expenses like photography or staging. However, many agents will waive the fee if the cancellation is mutual or the contract includes an exit clause.

“Usually, the best way to exit any contract is to have built-in exit clauses from the very beginning,” advises Valdez. Always check your agreement to see what fees, if any, apply before moving forward.

Alternatives to canceling a listing contract

If you’re unhappy with your current agreement but aren’t ready to cancel the contract outright, here are a few alternatives to avoid starting from scratch or facing cancellation penalties:

• Request a different agent: If your agent works at a larger brokerage, you may be able to switch to someone else on the team without breaking the contract.
• Pause the listing: Some agents will allow you to take the home off the market temporarily while you reassess your plans or address any issues.
• Adjust expectations or strategy: A candid conversation might lead to changes in pricing, marketing, or communication that could improve the relationship and results.

“Hit reset. Re-evaluate pricing, revisit the marketing strategy, and reassess the presentation plan. Treat it as a fresh start,” suggests Valdez. “From that point forward, set up a clear game plan. If the agent isn’t taking the lead on this, sometimes the seller can step in and say, ‘Okay, this is what we’re going to do to get it to the finish line.’”

How can you avoid needing to terminate a listing agreement?

The best way to avoid canceling a listing contract is to start with the right agent and understand what you’re signing from the get-go.

“What I would do is interview two, three, or even four different agents. Have them provide their perspectives on pricing, marketing strategy, presentation, and communication. Ask how they plan to keep in touch throughout the process,” says Valdez. “That way, within a week, you can be more informed about different approaches and decide what works best for you.”

Here is a guide to follow before committing to an agent or a contract:

• Talk to multiple agents: Interview at least three agents to compare their experience, knowledge, communication style, and overall approach.
• Check references and reviews: Ask for references and check online reviews to get an idea of their past performance, including the sale-to-list ratio.
• Ask about marketing strategies: Inquire about how they will market your house (online listings, flyers, open houses, etc.).
• Discuss your goals: Talk about your desired price range, timeline for the sale, and any specific needs or preferences.
• Read the contract carefully: Pay attention to the length of the agreement, any cancellation terms, and whether there are fees or protection clauses.
• Don’t be afraid to ask for changes: If you’re uncomfortable with terms in the contract, such as the exit clause, be prepared to negotiate and seek amendments to the agreement.

“A lot of times, people don’t look at the exit clause or even read the listing agreement until much later, after issues have already come up. Then, they realize they’re locked in for eight months and have to pay $5,000 to get out early,” Valdez warns. “These are things that should have been negotiated up front.”

Choosing the right agent makes all the difference

Canceling a listing contract can be frustrating, but it’s sometimes necessary when expectations aren’t being met. Whether you’re dealing with poor communication, lackluster results, or simply a difference in personality, understanding your options can give you more control over the situation. The best way to avoid a cancellation in the first place is to start with a trusted, top-rated agent who’s aligned with your goals and priorities.

“From what I’ve seen, the best approach is to pick your next agent before canceling the listing. That way, when other agents start calling, you can simply direct them to your new agent and stay focused on moving forward,” says Valdez.

HomeLight’s Agent Match can connect you with top-performing real estate agents in your area based on actual sales data. Our research indicates that the top 5% of agents sell homes for up to 10% more than the average agent.

Editor’s note: This post is meant for educational purposes and is not intended to be construed as legal advice. HomeLight always encourages you to reach out to an advisor regarding your own situation.

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