Can someone explain the holder clause for me. My listing is about to expire and I'm considering changing agents because I'd like to use a local one.
Does the holdover clause mean that if anyone who saw my property - not with my agent but with their own, comes back to see it again after I re-list it, and this time decides to buy it that I now owe double commission? Both to my new agent and the original one? And if so how do I protect myself from selling to these buyers?
What if I have a price reduction after I re-list? My holdover is for 6 months.
GREAT QUESTION Steve! It sucks that the first Realtor didn't fully explain what you were signing and how situations like this would work... but not to worry, we're all here to chime in and offer advice!
Before I give my opinion, I think it's appropriate to say it's best you speak with a lawyer in the field for their legal insight on the matter. There may be parts of the story i'm missing, so I don't want to give advice that may mislead you
... legal disclaimers aside, here's how I see it - Basically the hold over period means the following:
If the Seller ends up selling the property privately to a Buyer who was introduced or shown to the property within the contract period, the seller would be responsible for compensating the original listing Realtor. A couple key things to note here is that the holdover applies in you're selling it PRIVATELY. Secondly you're re-listing after your existing contract expires.
The second part of the contract goes on to read: If, however, the offer for the purchase of the Property is pursuant to a new agreement in writing to pay commission to another registered real estate brokerage, the Seller’s liability for commission shall be reduced by the amount paid by the Seller under the new agreement.
I understand this to mean, so long as you pay the new Realtor the same (or more) than the original Realtor, nothing more is owed to the original Realtor if a purchaser comes back during your new listing contract and purchases your place.
The price reduction makes no difference to the wording of the Holdover period.
I was taught that the "holdover period" was introduced to protect the Listing Realtor from sellers who would try doing side deals with buyers that were introduced to the home by the efforts of the listing Realtor. For example, the seller would pull the buyer aside and suggest the do they deal privately and without the Realtor once the listing expires.
Once again, i'm only going by the limited info provided above, but I don't see any big risk from how described your issue and your plans of re-listing with a new Realtor. For your own protection, make sure you have the conversation with your new listing agent what your previous listing history has been. The new one should know the questions to ask, and can even touch base with the previous brokerage to make sure there's no potential issues!
When I take over a listing that was already on the market, I like to know what went wrong the first time around. That way all parties can work together for a much smoother experience and sale!