Real estate gurus - realtor commission question

[KoolAidKid]

My wife and I have had our house on the market for some time now. We decided to try a different approach and rent it out instead. I told our realtor that we wanted out of our listing contract so that we could put it on the rental market. She agreed.

We did all of our own advertising for tenants; our realtor does not handle rentals. We had a well-qualified applicant state a desire to do a rent-to-own (lease-option) contract. They want to lease for two years with an option to purchase at a fixed price at any point during that period.

My question is obvious: if we were to sign a lease-option agreement within the next week, do we owe the realtor a commission on the eventual sale?

Since any good answer will depend on the details of the contract, here is the relevant bit from our Exclusive Right to Sell agreement:

Seller agrees to pay Brokerage Firm 6% of the total purchase price upon occurrence of any of the following:
A. If the Brokerage Firm or anyone else produces or finds a purchaser or lessee ready, willing, and able to purchase or lease the property at the price and terms offered in this agreement or at any price and terms deemed acceptable to the seller; OR

B. The sale of the property during the terms of the agreement, by seller or through any other source; OR

C. During the term of this agreement, if the property is withdrawn and subsequently sold, or made unmarketable through the seller's voluntary act; OR

D. The sale of the property is made by the seller within 90 days after the term of this agreement (the "protection period") to persons whom the Brokerage Firm has introduced the Property during the term, PROVIDED HOWEVER, that Broker submits to Seller a notice or other writing, either before or within 5 days after the end of the Term, which discloses the names of the prospective buyers. This provision will not apply if the seller enters into an exclusive listing agreement with another licensed broker during the protection period.


Please understand, we are not trying to get out of paying the commission if it is owed. If we owe it, we will pay it. I am trying to find out if it is owed, and calling up my former agent to ask her if I owe her money doesn't seem like the smartest idea.

Thanks for any guidance!

 

[DAGTA]

I am not a lawyer or real estate agent.

Why not set up a simple rental agreement with no mention of purpose? If the renters decide to purchase a year or two from now, discuss it then.

 

[fralexandr]

You didn't sign a new exclusive listing when you decided to rent out the property, right?

I am also not a lawyer, but as long as it's a typical standard listing agreement for selling a house, you do not owe the listing agent a commission as long as the sale occurs outside of the listing contracts duration (If the agent never sent you an offer from the potential renter).
There's nothing special written in the additional terms/extra lines for writing stuff, right?

If the agent did communicate an offer from the renter to you, you would owe commission to the agent if you SELL the property to the renter within 90 days of the end of the listing contract.

If the sale occurs 90 days after the listing contract expires, you owe the agent nothing.

Obviously, it would be in your interests NOT to tell the agent any identifying information of the people you're renting to 😉.

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In theory (If your form is like the one used in California), the realtor could ask for commission if you receive an offer at your listing price with all the conditions you requested, even if you decline that offer. Though, any good realtor will not ask you for commission until your house is actually sold (close of escrow; if your area does escrow).

 

[arkcom]

you do not owe the listing agent a commission as long as the sale occurs outside of the listing contracts duration

Rent to own is the same as sold, as far as a commission is concerned.

 

[KoolAidKid]

You didn't sign a new exclusive listing when you decided to rent out the property, right?

No, we haven't.

There's nothing special written in the additional terms/extra lines for writing stuff, right?

No, nothing that I can find. Looks pretty boilerplate.

If the agent did communicate an offer from the renter to you, you would owe commission to the agent if you SELL the property to the renter within 90 days of the end of the listing contract.

If the sale occurs 90 days after the listing contract expires, you owe the agent nothing.

Obviously, it would be in your interests NOT to tell the agent any identifying information of the people you're renting to 😉.

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In theory (If your form is like the one used in California), the realtor could ask for commission if you receive an offer at your listing price with all the conditions you requested, even if you decline that offer. Though, any good realtor will not ask you for commission until your house is actually sold (close of escrow; if your area does escrow).

Thanks for your response, I really appreciate it. :awe: That was my reading of the contract language as well.