In California, listing agreements are important contracts that create a clear relationship between a home seller and their real estate agent. But sometimes, you as the seller may want or need to cancel the agreement. There is even a form to do so called “Cancellation Of Listing” (C.A.R. Form COL, Revised 4/11).

In this blog, we'll explain what listing agreements are, why you might want to end one, and how you can do it legally.

This article covers Listing Agreements, not purchase agreements or “RPAs” different laws and regulations apply once you've decided to sell your home to a buyer and have signed an agreement to sell your home to them.

What Is a real estate listing agreement?

A listing agreement is a legal contract between a property owner and a real estate agent. It explains how the agent will help sell the home, and allows the agent to be the only one to be able to sell the home on your behalf and represent you in the real estate market. In California, there are three main types of listing agreements:

Exclusive Right to Sell to Buyer: This is the most common, if you've already listed your house for sale this type of agreement is most likely the one you've agreed to.

Exclusive Right to Sell means the real estate agent you hire is the only person allowed to sell your home during the time of the agreement. Even if you, the seller, find a buyer on your own without the agent's help, the agent still earns a commission from the sale. This type of agreement gives the agent strong motivation to market your home aggressively because they are guaranteed to be paid if the home sells.

Exclusive Agency:

In this type of agreement also known as an exclusive agency listing agreement , the real estate agent still works to find a buyer, but the seller keeps the right to sell the home on their own. If the seller finds the buyer without the agent's help, they don't have to pay the agent a commission. However, if the agent finds the buyer, they earn the commission. This setup can motivate sellers to try to find a buyer themselves while still having the agent's help as backup.

Open Listing:

With an open listing agreement, the seller can work with as many real estate agents as they want — or even find a buyer on their own. Only the agent who actually brings a buyer who closes the deal will earn a commission. If the seller finds the buyer without any agent's help, they don't have to pay any commission at all. This gives the seller a lot of freedom but can also mean that no one agent is fully motivated to market the property aggressively.

Knowing which type of listing you have is important when thinking about canceling your agreement.

Why Sellers Want to Cancel

There are a few common reasons why sellers want to cancel their listing agreement:

1. The Agent Isn't Doing a Good Job: If the agent doesn't market the property well, doesn't communicate, or doesn't meet promises, the seller may want to end the agreement.
2. Personal Changes: Life events like moving to a new job, health problems, or financial troubles might make it impossible to keep the home for sale and you may want to cancel the agreement.
3. Arguments or Disagreements: If the seller and agent don't agree on pricing, listing price , marketing, real estate commission or other strategies, the relationship can break down.
4. New Agent: Sometimes you've met a new agent or agency that you believe is more capable and better suited to market your property and make a better sale, but you may be tied to your existing agent through the listing agreement.

Even if you have a good reason, remember that listing agreements are contracts. Ending one without following the rules can cause legal problems.

How to End a Listing Agreement in California

Depending on the type of listing agreement you entered into and what you signed says, you may have the following options:

1. Mutual Agreement

The easiest way is if both you and your agent agree to end the contract. Always get the agreement in writing. If you face life events that make the sale impossible, explain why you want the agreement to be cancelled and if you are both in good terms, you can inform them that once your situation improves you can contact them again later on to sell your home with their help.

2. Check the Expiration Date

Most agreements have an end date. Once it expires, you're free to work with someone else or not sell at all. Talk to a real estate lawyer if you're unable to tell if your agreement has expired already or if you may have early termination options.

3. Breach of Contract

If your listing agent doesn't do what they promised, like failing to market your real property, or is ignoring their job duties, you might be able to cancel because of breach of contract. Talk to a real estate lawyer if you think this is your case.

4. Cancel on Your Own

In some situations, if the written agreement allows you to, you can cancel the agreement without the agent's permission. This is harder since not all agreements contain this language and if you don't have this option written in your agreement, could lead to legal problems. You would need a strong reason, like agent misconduct or major life changes. Always get legal advice first.

Consequences of Wrongfully Cancelling a Listing Agreement

Cancelling a listing agreement the wrong way can lead to serious consequences. If you break the agreement without a valid reason, you might still have to pay your agent a commission, even if you sell the home later on your own. The agent might also sue you for damages, claiming lost time and expenses they spent marketing your property. On top of that, you could face legal fees and added stress from a lawsuit. This is why it's important to handle cancellation the right way and get legal advice before making any decisions.

Final Thoughts

It's not unusual for sellers to want out of a listing agreement. Whether it's because of a bad experience with an agent or sudden personal changes, it's important to handle it carefully.

If you're thinking about selling your home or want to learn more about the process in Southern California, we're here to help. Call or text (310) 564-8084, or contact us today to learn more!

At the Law Office of Steve Lopez, we understand how important it is to protect your real estate interests. With extensive experience handling listing agreement disputes and other real estate legal matters, Attorney Steve Lopez can guide you through the cancellation process and help you avoid costly mistakes. Contact our office today to schedule a consultation and get the trusted legal support you need.

 Have More Questions?

If you have further questions on your listing agreement such as;

What fees or costs might I owe if I cancel my listing agreement early?

Can the real estate agent refuse to release me from the listing agreement?

What should I look for in the contract before trying to cancel?

Does switching to a different real estate agent in the same company solve the problem?

How do I prove my agent breached the contract?

How long does it take to cancel a listing agreement?

Feel free to contact our office and an experienced real estate attorney can answer any questions you may have.

Disclaimer: This article is for informational purposes only and is not a substitute for legal advice. If you have specific legal questions, consult an experienced attorney.

References

• California Association of Realtors (C.A.R.), Standard Listing Agreements.
• California Civil Code § 1086-1090, governing real estate agent contracts and commission rights.
• Department of Real Estate (DRE), "Real Estate Law" and consumer resources.