How to Terminate an Agency Agreement

How to Terminate an Agency Agreement
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Real estate contracts vary, with every state offering different contracts and terms. Sellers sign listing agreements allowing a real estate brokerage to market and sell their home. Some buyers work under a buyer's agency agreement, aligning them with one real estate agent in the quest to purchase a home. Both agreements can be cancelled, but before you consider terminating a binding contract, read the paperwork carefully. You may be financially responsible to a brokerage office even after the broker signs a termination agreement.

Read the contract you signed with the real estate agent, especially the paragraphs pertaining to the termination of the agreement. Establish your grievances in writing and outline where the agent has failed you before you approach the agent to discuss cancelling the binding contract.

Discuss frankly and openly why you're dissatisfied with your agent. Give your agent a chance to correct her mistakes so you can move forward together. Identify contractual points she's failed to provide. Substantiate your complaints. Speak to her broker if you reach a stalemate, as your contract is legally between the brokerage and you.

Review alternatives to salvage the contract suggested by the broker, such as using another agent within the company for the duration of the contract. If these terms are unacceptable, pull your house off the market if you've decided not to sell, or refrain from looking at properties if you've decided not to buy, as these are the most valid reasons you can use when requesting a termination. Be aware that you can be made to buy or sell and pay commissions if you fire your agent after you have entered into a sales contract with a buyer or seller.

Negotiate terms to officially end the contract, such as paying a termination fee, depending on the amount of time and money that the broker invested in your transaction. Alert the broker to the possibility of your writing a complaint to the state department of real estate if the agent, under the guise of the brokerage, did not act in good faith while handling your listing or acting as your buyer's agent.

Get the termination of the contract in writing, if a mutual termination was agreed upon.


  • If a seller decides to pull the house off the market, or a buyer wants to stop looking, the broker can't force the seller to sell or the buyer to continue looking. However, the broker is entitled to a commission if the seller continues with another agent and sells during the remainder of the contractual agency period or a specified period afterward -- or the buyer purchases a home during the agency period or within a certain time frame afterward.