“Am I still entitled to my brokerage fee if the transaction closes after the listing period?”
October 24, 2024
*Please note: Any questions regarding Legal Hotline Spotlights should be submitted via the Virginia REALTORS® Legal Hotline. Our attorneys are unable to respond to questions through our comments section.
Q: I have a one-year listing agreement with my seller. In the last month of the listing period, an offer came in, and I presented it to the seller. The seller accepted, but the transaction is not set to close until after the listing period. Am I still entitled to my brokerage fee when the transaction closes?
A: First, we need to read the contract, which in this situation is the listing agreement. The listing agreement will describe when a professional services fee or brokerage fee is earned by the listing firm.
Virginia REALTORS® Exclusive Authorization to Sell agreement (Form 400) provides in Paragraph 4(a) that if the property is sold or exchanged within the term of the agreement, then the brokerage firm has earned its fee. Here, “sold” means a ratified purchase contract. Therefore, since a contract was ratified during the listing period, the listing firm earned its fee.
There are also other situations where the owner may owe the broker the fee after the listing period. For example, the offer was presented during the listing period, but ratification did not occur until afterward.
Keep in mind, there are many different standard forms in the commonwealth, and some firms may use their own custom listing agreements. Always carefully read the particular terms of your listing agreement to understand when fees may be due.
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