Dear Real Estate Adviser,My mom signed a contract with a Realtor last night. Previous to this, a contractor who had been working on the house told her that he had someone interested -- but we didn't hear back. Today, he shows up and he wants to buy the place himself! My mom is 87 years old. Is there such a thing as "three days to change your mind" in real estate?
-- Carol M.
Dear Carol,
"What a difference a day makes," as that classic song, which your dear ol' mum likely recalls, goes. Unless she added an unconditional exit period for herself in the contract, which seems highly unlikely, or the listing term didn't begin immediately, she may be stuck with an enforceable contract -- with an emphasis on the "may."
"What a difference a day makes," as that classic song, which your dear ol' mum likely recalls, goes. Unless she added an unconditional exit period for herself in the contract, which seems highly unlikely, or the listing term didn't begin immediately, she may be stuck with an enforceable contract -- with an emphasis on the "may."
Firstly, there's no such three-day grace period for listing agreements. You may be confusing this with the three-business-day "right of rescission" cooling-off period, which applies to the acquisition of home equity loans, lines of credits, time-share and other vacation real estate purchases and select other transactions.
First, read the contract
But before you do anything, take a close look at that contract to see which of three basic types of listing agreements she signed:
- The most common is the "exclusive right to sell," where the listing agency gets the commission when the sale closes, regardless of who produces the buyer.
- The less common "exclusive agency agreement," which gives the agent exclusive agency rights to market and sell the place but allows owners the right to sell without paying commission if they find the buyer, would give your mom an out.
- The third and least common agreement, an "open listing" where any agency that produces a buyer gets the commission but owners still retain the right to find their own buyer without commission obligation, would also put your mom in the clear.
Have a cordial talk with the agent
Assuming she didn't sign either of the latter two, have an immediate (but congenial) talk with the Realtor. A truly ethical Realtor, especially if she made no effort or investment yet in selling the home on your mom's behalf, wouldn't try to take advantage of an 87-year-old woman who obviously found a buyer on her own -- at least you'd hope.
I have heard examples where agents hold fast regardless of the scenario or the vulnerability of the parties involved, however. If this is the case, try offering said agent a few hundred bucks to go away. If she has incurred provable expenses already, offer compensation for those. State on any check that cashing it ends all your mom's obligations to the agent.
The agent still could be helpful
Alternatively, your mom could offer fee-based compensation to the agent to handle the paperwork and shepherd her through the deal. You don't want to leave your mom without representation, even in a "friendly" sale. (Some states require a real estate lawyer to handle transfer documents and closing, so you might try to get a package deal for transaction-related services this way instead.)
Any way this falls out, ask your mom to get your advice or that of another sibling or an attorney before she signs anything more. I wish her good luck in the sale.
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