What Is The Protection Period Clause In The Listing Agreement?

What Is The Protection Period Clause In The Listing Agreement?

article_22211_1[1]What is a Protection Period?

Not too long ago I got a new listing that was previously listed by a different Brokerage. When you list your home you and your agent will agree to a time-frame that the agent can market and attempt to sell the home, usually six months.

After I took the listing the previous listing agent sent me an email:

“I have a 90 day protection period with the seller, if you sell the home I want you to know that I am entitled to 3% commission.”

 

Not likely.

 

Below is a portion of the Listing Agreement Texas REALTORSĀ® are required to use when they list a home. Under E. (1) you would see the number of days agreed upon by the home owner and the Listing Agent for the Protection Period.

 

protection period

 

What the previous REALTORĀ® did not understand was that if the home is RELISTED the Protection Period is null and void.

So what is the protection period for? When does it apply?

The protection period prevents the unscrupulous practice of the Seller telling the buyer to come back to buy the home AFTER the Listing Agreement has expired.

Imagine a Seller listing their home with Go Get ‘Em Realty for six months. The seller takes full-advantage of the exposure, marketing and advice from their REALTORĀ® and at first opportunity attempts to procur a buyer from those efforts and in doing so tells a buyer to come back after the Listing Agreement has expired.

A Listing Brokerage/Listing Agent can protect themselves by providing a list of buyers the Listing Agent has worked with during the six month period. If a seller relists the home, all bets are off.

Each State has their own version of a Listing Agreement and the verbiage can and probably is very different. It’s important you speak to your agent and/or real estate attorney for any type of clarification when making contractual real estate decisions.

No Comments

Post A Comment