House listed for sale, can we rent it out?

[Sheryl]

We signed a 60-day listing, which expires 9/3/08. It's a house near Buffalo, NY, 80 miles north of us, that my daughter moved out of in June. So far, we've had only 1 showing, no feedback. The realtor has yet to put flyers in her sign in front of the house, and hasn't replaced my lockbox with that of her company's. We have an opportunity to rent it out, but the people need to move in 3 weeks before the listing expires. I'm not optimistic that the house will suddenly be shown, and an offer forthcoming, anytime in the next 3 weeks. Both us & the possible renters would like to lease thru May '09 ... Can we do this, legally and ethically?

 

[Patri]

It's your house so I certainly think you have the right to take it off the market if you decide not to sell. That's all you have to tell the realtor. I don't know what's legal but you should be able to do this with no problem. Maybe in 9 months the market will have improved. You are fortunate to have found renters. And don't sign anything that will give the realtor a commission if these people decide to buy it. I have no idea if that is even in the far reaches of their minds, but if so, the realtor had nothing to do with it.

 

[lprstn]

You can cancel your contract with the Realtor and rent it...

My DH is a Realtor and you can write a written cancellation of your listing contract and rent out the property.

 

[Sheryl]

Thanks; I appreciate your advice and thoughts. The realtor was NOT happy, and said she'd have to "talk about this" with her broker. That doesn't make sense; you folks do! I appreciate your reassurance, and didn't want to do anything unethical. I'd actually turned down two offers to rent in the last month, but am going with the 3rd offer; all 3 needed to be in by mid-August.

 

[nicklinneh]

don't rent it long-term, because if you do sell it, you're stuck with the lease. -ken

 

[Lawlar]

Right to Rent

I'm not so sure you can cancel your listing. You signed an agreement with the broker so she has a legal expectation that she will have an opportunity to sell your home. On the other hand, at least in California, brokers have been reluctant to sue their clients because it is bad for their reputation. Additionally, the broker can't show damages easily, if she sued you, because there is no gurantee that the broker would be able to sell your house.

On the other hand, you should be very careful who you rent to. It is common for renters to leave early and cause considerable damage to the house. I've seen homes totally destroyed by renters. And if you have to evict the tenants because they refuse to pay rent it can take you months to get them out and considerable legal fees to do it. Also, it is really difficult to sell a home if you have tenants (in case you decide to sell again).

No easy answer.

 

[Bill4728]

I was under the impression that a listing to sell your house was able to be canceled at any time BUT you couldn't cancel it from broker A then list it with broker B. But you could take it off the market at any time and use the home or rent it, ect..

 

[Lawlar]

Not so IMO

I was under the impression that a listing to sell your house was able to be canceled at any time BUT you couldn't cancel it from broker A then list it with broker B. But you could take it off the market at any time and use the home or rent it, ect..

I don't believe that is accurate. When you sign a contract with a broker, you have given her the right to sell your home for the time listed. The broker will often, in reliace on that contract, spend money and time marketing the property. If the broker finds a ready and willing buyer the broker is entitled to her fee, even if the seller changes her mind. There is no provision in a listing agreement that gives the seller the right to cancel the listing.

In the 90s it was common in California for brokers to sue sellers who took their homes off the market after the broker found a buyer. [I handled some of those lawsuits.] But brokers stopped suing when the RE market improved in the later 90s and they became concerned that they would get bad reputations if they sued their clients.

 

[silvib]

Sheryl, I'm a RE Broker in FL and in the standard exclusive right of sale (listing contract) document that we use, there's a space to add or not as the case may be, a monetary amount of compensation to the broker if the seller decides to take it off the market before the listing expires. Do you have this in yours? Down here, no-one signs a listing agreement for such a short length of time, 60 days, especially in this market. Most people sign up for 180 days. However, there's nothing to stop you renting your property whilst it is listed for sale as long as your realtor is aware of the situation, so she can share this information with potential buyers. Of course, unless she has someone wanting to buy it for investment purposes, no-one will want to wait until May 2009, which makes it impossible for her to sell it. Maybe your options should have been studied before signing the listing agreement, sell or rent. However, to touch on a point brought up by Patri, and again depending on the type of listing agreement you have signed, if these people that you may rent to decided to buy it and it was during the time frame of the listing agreement and/or the grace period after expiration, you would be responsible for paying a commission to your realtor. Depends what you signed.
Please make sure you're careful about who you're renting to. I'm sure there are as many horror stories out there as there are success ones.

 

[aliikai2]

You can fire anyone that you can hire

Your example is where the seller attempted to defraud the Broker of their commission.

This isn't that at all, they are simply removing the property from the " For sale market".

If by some odd set of circumstances, the seller had agreed to a rental listing, then they would owe the listing broker and working agent a fee.

In most states, if they sell the house to anyone that the broker showed within the next 6 months, they then would also owe the commission.

fwiw,

Greg

I don't believe that is accurate. When you sign a contract with a broker, you have given her the right to sell your home for the time listed. The broker will often, in reliace on that contract, spend money and time marketing the property. If the broker finds a ready and willing buyer the broker is entitled to her fee, even if the seller changes her mind. There is no provision in a listing agreement that gives the seller the right to cancel the listing.

In the 90s it was common in California for brokers to sue sellers who took their homes off the market after the broker found a buyer. [I handled some of those lawsuits.] But brokers stopped suing when the RE market improved in the later 90s and they became concerned that they would get bad reputations if they sued their clients.

 

[Lawlar]

Not So

Your example is where the seller attempted to defraud the Broker of their commission.

This isn't that at all, they are simply removing the property from the " For sale market".


fwiw,

Greg

I don't believe that is accurate. If you sign a contract you can't simply cancel or "fire the broker." A contract creates an enforceable right to market the property and seek a commission. It would be like the Yankee's firing one of their players. They can do it, but they still have to pay the salary.

This is not an issue of fraud.

 

[silvib]

In the standard contract we use, there is a clause "Conditional Termination" whereby at Seller's request, Broker may agree to conditionally terminate the Agreement, etc.etc. The seller may want to do this for several reasons - they change their mind, the realtor isn't performing (in this case sounds like Sheryl isn't happy with her realtor's performance), they want to rent it out.
There is usually a cost associated with taking this action, which would be in the document.
The property cannot just removed the market without further ado, but again, it depends what has been signed.
None of us know which specific agreement Sheryl has signed and I still find it surprising that in this market, any realtor would want to sign something for only 60 days.