Withdrawn not the same as Terminated

HOT LINE: A "Withdrawn" Listing?

QUESTION: The owner of a listing that is shown in the MLS as "withdrawn" would like for me to list his property. I had the owner speak with the previous agent to make sure they had it shown as withdrawn; the previous agent said it "pretty much was withdrawn". What other steps can I take to make sure that, if I list the property and get it sold, the previous agent cannot come back and try to get a commission on the sale?"

ANSWER: "Withdrawn from the MLS" is NOT the same as the listing being terminated.

A listing agreement is a written contract which establishes an agency relationship between a seller and a real estate company. In order to terminate this contract, it requires a termination and release in writing and signed by all parties to the listing agreement. It should terminate the contract and release both sides from the obligations under the original listing agreement. Until this is completed, the listing agreement will continue in place until its natural termination. TAR does provide a form which will effectively terminate the listing. This is form F82. This form will allow you to place limitations on agreeing to release the listing such as a carry-over period or a termination fee. However, if the seller lists the property with another agent during the carry over period, the obligation to pay a commission is terminated. Another possibility would be to require a referral fee if the seller sells the property to that particular buyer. This should be done in the release agreement.

Since the question arises as to whether the listing is still active or merely withdrawn from the MLS, you could contact the other company to see if the seller is still subject to the listing agreement. If they are, then you can ONLY advise the seller that they will need to conclude their business with the other firm and/or contact their own attorney. You cannot advise the seller as to the steps necessary to terminate the listing agreement. This could subject you to a claim for interference with a contract which could result in complaints before the Real Estate Commission, the local board or in court!

[SOURCE: TAR's Legal & Ethics Hot Line Attorneys]