Selling a home is not child’s play and the seller needs to be absolutely certain that he wants to sell before he puts the property on the market.
People put their homes on the market for a multitude of reasons and in most instances are more than happy when a willing buyer appears. There are however times when a seller changes his mind and removes his home from the market, and that's his prerogative. What sellers don't realise though is that there can be consequences to this and unfortunately these could be costly if the estate agent involved has found a buyer who is willing to pay the asking price.
Under ordinary circumstances an estate agent’s commission is only payable once the sale has gone through - in other words, once he has fulfilled his mandate. Sales collapse all the time, usually because a bank won't grant a bond and in such cases the buyer, seller and agent all walk away unscathed. Broadly speaking the fact that the deal collapsed isn't anyone's fault and therefore there's no claim.
The situation is very different when an agent does his job and spends his time and money in order to find a willing and able buyer, only to find that the seller changes his mind at the last minute and removes the property from the market. In this case, the agent has fulfilled his mandate and as such could go to court in order to compel the seller to pay his commission.
“Every situation is different and although it's pretty rare, a court could find the owner of the property liable if it finds that the agent has fulfilled his mandate by introducing a willing and able buyer to the seller,” says Dina Porteous, operational principal Keller Williams Realty. “If the proverbial shoe was on the other foot and a willing and able buyer walked away from a deal, the seller could claim damages and part of those damages could include the agent’s commission.”
Fortunately, thanks to the cost of litigation, most agents will walk away from such a situation unless of course the commission earned is extremely high. Larger property groups are generally very protective of their reputations and in many instances won't be drawn into the fray, but - and this is a very big but - this doesn't necessarily mean they wouldn’t take legal action if the loss incurred is substantial.
“Generally what happens is that the agent won't take the legal route but will calculate how much he has spent advertising and marketing the home and ask the seller to pay these expenses,” says Porteous. “What does need to be remembered is that these situations leave a bad taste. The buyer is unhappy, and the agent has lost money. It could also impact the seller if and when he decides to re-market the property, particularly if it became widely known that the seller had a reputation for changing his mind.”
Selling a home is not child’s play and the seller needs to be absolutely certain that he wants to sell before he puts the property on the market. Sellers come in various forms. There are serious sellers, who will be willing to negotiate; there are sellers who ‘test’ the market by overpricing their homes and there are sellers who reject offers made for the full asking price because they have a hunch that the home could be worth more. The last category often proves to be the most problematic, which is why it's so important to have a realistic idea of what the property is actually worth. Those who play around and attempt to make more of a profit by turning down offers which meet the original asking price could lose out in the long run, especially given the current economic climate. Selling property is a serious business and anyone who puts their home on the market needs to understand that there could well be consequences if they change their mind for the wrong reasons.