Sometimes, life throws curveballs. You might list your house with a realtor, only to decide later that you're not ready to sell. But does that mean you're off the hook for paying a commission? Not necessarily. It depends on the terms of your listing agreement. Understanding real estate contracts is critical.

Types of Listing Agreements:

• Exclusive Right to Sell: This is the most common type of listing agreement. It means the realtor gets a commission if the house sells during the listing period, regardless of who finds the buyer (even if you find the buyer yourself).
• Exclusive Agency: With this agreement, the realtor gets a commission if the house sells during the listing period, unless you find the buyer yourself.
• Open Listing: This is the least common type. It allows you to list your house with multiple realtors, and only the realtor who brings the buyer gets a commission.

When You Might Owe a Commission Even if You Don't Sell:

• During the Listing Period: If you withdraw your listing during the term of an exclusive right to sell agreement, you'll likely still owe the realtor a commission.
• After the Listing Expires (in some cases): Some listing agreements have a "protection clause" or "holdover clause" that entitles the realtor to a commission if the house sells to a buyer they showed the property to within a certain timeframe after the listing expires.
• If You Breach the Contract: If you violate the terms of the listing agreement, you could be liable for damages, including the commission.

Negotiating with Your Realtor:

If you decide not to sell, it's always best to communicate with your realtor as soon as possible. You may be able to negotiate a cancellation of the listing agreement, especially if you have a valid reason for withdrawing.

Creative Financing and Listing Agreements:

If you are considering creative financing, it is important to discuss this with your agent upfront. Some agents may not be familiar with these types of transactions. If you decide to pursue a creative financing strategy, you may want to consider working with a specialist, like Tact Prudence, in conjunction with or instead of a traditional real estate agent.

Protecting Yourself:

• Read the Listing Agreement Carefully: Before signing anything, thoroughly review the listing agreement and understand all the terms and conditions.
• Ask Questions: Don't hesitate to ask your realtor any questions you have about the agreement.
• Seek Legal Advice: If you're unsure about any aspect of the listing agreement, consider consulting with a real estate attorney.

Ready to explore your options? Contact the experts at Tact Prudence today for a consultation on how creative financing can help you sell your home on your terms. Call us at 865-272-2000. Understanding the paperwork involved in selling a house by owner can also be helpful context. And if you're thinking about the best month to sell a house, that can also be a factor in your decision. It's also important to consider what puts the most value on your house. Finally, understanding if you're in a buyer's or seller's market can inform your strategy.