Denver Divorce and Real Estate Lawyer Blog. (Vol 1.52)  February 9,  2015

By Craig Franklin Chambers Esq. 7851 S. Elati Street #204, Littleton,  CO 80120

The Littleton Lawyer.

As a Denver-area attorney practicing family law, custody, divorce and real estate law in Littleton, Highlands Ranch, The Tech Center, and Arapahoe, Douglas, and Jefferson County,  I am often asked the question: Can I fire my real estate broker?

The issue arises when a consumer hires a real estate broker as either their listing or selling broker, and then becomes dissatisfied with the broker's performance. Or perhaps the seller takes the home off the market during the listing period and then finds a buyer on his own.

When you hire a real estate broker, you sign a standard Colorado Real Estate Commission-approved listing agreement with the broker's firm. The listing agreement has a set term, usually between four and six months.

Under the standard contract with the broker, if you enter into a real estate transaction during the term of the listing agreement, you owe the broker a commission, which is usually between 5-6% of the sales price, 2.8% reserved to pay the broker who brings the buyer.

The legal term under the contract is that you owe the broker a commission if he is  the "procuring cause" of the real estate deal. The "procuring cause" is the broker who brought forth or caused the transaction to occur. Because you signed the listing agreement, the broker you employed is considered the procuring cause whether or not he is involved in the sale.  And you owe the commission whether or not you include the broker in the transaction.

If you are unhappy with the broker, my first advice is to contact the broker or the employing broker for the real estate firm, and ask that the listing agreement be released. Real estate brokers rely on word of mouth and good -will to get their business, and most don't want a hostile or unhappy client. The release needs to be in writing.

If the brokerage firm won't sign the release, you are stuck with the broker until the listing  agreement expires.  You can still utilize the services of another broker, or enter into a transaction with the broker, but if you do you still owe the original broker the commission.

If you sign a listing a new broker, and still exclude your current broker from the real estate transaction during the term of the listing agreement,  you legally owe two real estate commissions ---  one to the old broker and another to the new broker. This could be a substantial sum of money, and it very important that you understand how real estate commissions work and the terms of the listing agreement you sign.