Proactively Deal with Expiring Agreements
January 17, 2017
All real estate agreements expire. A specific date is always included to identify to the consumer the time period that they have agreed to receive services from the brokerage. Once the agreement expires, the client has no longer agreed to receive those services and, thus the brokerage must not continue to provide those services after that time.
For instance, say a Seller Brokerage Agreement is scheduled to expire on May 3rd. If the property has not sold by the end of the day on May 3rd, the brokerage must take immediate action to remove the property as an active listing on any listing service, remove any For Sale signage, remove any digital advertising, return any documents obtained by the seller (i.e. condo documents), remove any lockboxes and any other services the seller and brokerage agreed to in the Seller Brokerage Agreement, before May 3rd. The requirement would be the same for a Seller Brokerage Agreements that is terminated early.
For buyers, the same mechanics apply. If a Buyer Brokerage Agreement is scheduled to expire on April 16th, the brokerage can no longer offer the agreed services to the buyer in their search for a property after that date.
Extending Brokerage Agreements and Service Agreements
If the consumer wishes to extend an agreement for whatever reason this can only be done if the original deadline has not yet expired. This is because once a contract expires, it ceases to exist.
The proper time to extend an agreement is before it expires and can be done using a simple amendment form. Any agreement to extend an agreement must be in writing with a bona fide signature. Once an agreement has expired, it is required that a new brokerage agreement or service agreement to be completed to renew the relationship between both parties.