Can a seller back out of a listing agreement without paying a commission when they are given a full price offer?

Asked over 1 year ago - San Francisco, CA

Our brokerage has a signed listing agreement that states we get paid a brokerage commission should we find a buyer who is ready, willing, and able to purchase the property on the terms on the listing agreement. The Sellers told us to do a price reduction in an email signed by all parties to the trust but coming from an email address of only one member of the trust. We also have a saved voicemail from a member of the trust saying they would sell at that price. We have now given them three full price offers on the reduced price. They now are saying they do not want to sell. My team and I spent a ton of time, money, and effort on this. The offers are in the 7-8 million range. The total fee would be somewhere in the $200,000 range. Do we have a case to obtain commission? Any issues?

Attorney answers (3)

  1. Matthew Lorin Kabak

    Contributor Level 4

    2

    Lawyers agree

    Answered . You potentially have a valid claim for breach of contract. It depends on what the original listing agreement says about amending the agreement. It may be that the original listing agreement requires all parties to sign a modification (such as an amendment to sell the property at a reduced price) to be validly amended. On the other hand, in some circumstances, email communications can be binding and enforceable as a writing, particularly where the email contains the full name of the party to be charged. You should hire an attorney to review your documents and conduct limited legal research to properly evaluate the strength and weaknesses of your claims. You might have a good case.

  2. Janet Spiro Martin

    Pro

    Contributor Level 13

    Answered . If your agreement provides for arbitration, use it. That's what it is for. Much easier and faster than litigation. Otherwise you'll have to start the "legal" process with an attorney letter outlining the facts and demand for payment. If there is any question about the authority to reduce price, expect that defense.

    The foregoing is for informational purposes only and may not be relied on as attorney-client advice.
  3. Michael T Millar

    Pro

    Contributor Level 19

    1

    Lawyer agrees

    Answered . I am not a CA attorney, laws vary from state to state, therefore you should always consult a local attorney.

    Here in NJ, I represent real estate brokers and have successfully sued for commissions.

    The law here is that if the broker presents a ready, willing and able buyer at the asking price (with no requests to change the contract of sale), then the seller is required to accept the offer - and the seller would be liable to the broker for the commission for failing to complete the transaction.

    You should consult a CA attorney who is familiar with brokerage law.

    If this answer was helpful, please mark it as helpful or as a best answer. This answer is for general education... more

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