I own a condo in Chicago and put it up for sale in early May with a referred realtor. I did an intake call before deciding to sell with this agent and she appeared to be fully capable. From the beginning I notated that I can only list my property until July as I don't have the financial luxury to let it sit empty for long. If it's not sold or under contract by July, then I need to pivot and get it rented. We agreed to edit the listing agreement to end in July.
Since it's been on the market I haven't felt a sense of urgency or that "take charge" attitude that I initially felt when we were interviewing. I'm so motivated to sell that I asked if it strategically made sense to do a price drop after the first 2 weeks based on the metrics of sales/showings/listing views of similar properties. The only 2 showings I've had came 1 month after the price drop.
My place has renters until the end of the month which does present challenges, but I'm all about solutions to problems. I'm not confident that she can get this sold even if she had more time and she mentioned a 2nd price drop which would put me below my break even point. If that's my only option then I'm definitely renting it and don't want to waste anymore time. At this point, I'd like to start the renting process with another realtor so it's rented around the time my current tenants are out. However, her contract is still valid for another 1.5 months and I don't want to be obligated to pay her a fee due to her contract on top of paying another realtor a fee for finding a tenant.
Can I please get some advice on how to navigate this? I know sellers decide not to move forward with sales regularly, but I'm not sure if it's as clean a break to put it back on the market for rent with another realtor.
I appreciate the advice.
@Sheri Go over your listing agreement, she should have given you a copy, and it will tell you how to break the agreement and under what circumstances you will owe her a fee or expense reimbursement.
I am also concerned that after your first price drop that you may be very close to your break even. Has your agent given you a net sheet that shows what you will net after all expenses, like realtor fees, tax prorations, condo association prorations, etc? You may have rock solid numbers and know how you stand. Your mention of break even got my attention.
I hope this helps!
The agreement includes a marketing commission fee that is required for all sales whether it's sold of not, but it doesn't state any specific termination fees or documentation requirements. I wasn't sure if there's a typical document/format for terminating the agreements apart from providing an email with an effective date and writing the marketing expense check.
She has not provided a net sheet, but that is an excellent idea. To be honest, I didn't know realtors would provide such things. I thought that was on the seller to put together themselves.
This definitely helps @Dustin, thanks!
Hi Sheri, Chicago broker/leasing agent here to weigh in. Couple things I wanted to touch on. 1) you can cancel the listing agreement so long as both parties agree to it in writing. As agents, it is in our best interest to maintain relationships vs making a quick buck. If your agent held the listing agreement over you she would be jeopardizing her relationship with you as well as the friend (their past client) who referred you to her/him. So it is unlikely they would choose to do that. 2) A month and a half on the market is not that long. Although the market overall is hot, the Chicago condo market, particularly for smaller units, is pretty weak in a lot of areas. Everyone is looking for more outdoor space and more rooms. 3) not sure how the unit looks but having tenants can make it a lot more difficult to sell. Harder to show and if the buyer wants to move in right away they will have to wait for the renter to first move out.
Hope this helps and PM me if you need any help or have any other questions!
@Sheri Prather I would recommend just having a frank conversation with the agent that you need to cancel by X date if you don't have a strong contract. Explain the financial situation behind it, and I am guessing your agent will be fine with it. I list a lot of property and listing a tenant occupied condo is honestly a bit of a nightmare scenario. Most of the owner occupied crowd are scared off because the tenants rarely keep the place immaculate for showings. The investor crowd will still take a look, but they will want a discount.
Another way to think about it is that you should have had 5-10 showings in the first week on the market. The market has been so red hot here in Chicago and if something doesn't sell in the first few weeks you are probably over priced.
Lastly, if your agent used the standard listing agreements from CAR or any of the other realtor boards, then there will definitely be a termination date in there. All of our listing agreements have them.
@Sheri Prather selling with a tenant in place is definitely harder, so if you are serious about selling, I may consider letting it go vacant. If you want to lease it to someone new, I am not even sure you need to break your listing agreement. Just hire someone to place a new tenant and update the listing agreement to say that the owner is actively placing a new tenant. The realtor can still keep trying to sell the property, but the buyer needs to be accepting that a new tenant will be moving in. You can also tell your realtor that you are willing to just mutually agree to drop the listing. This way you are not breaking the listing agreement, but by placing a tenant you are making it harder to sell. If by some chance the realtor brings you a good offer, you can still sell with the new tenant in place. It is kind of a win-win situation for you.
I would start by having a frank conversation with a friendly tone. Just be straight forward, "I need it sold or I need to place a new tenant. I can't drop the price further. I feel like this property is not a good fit for your business. Can we just part ways or do you have some other solution?"
Just ask her if she will terminate it.
Personally, as an agent I would let anyone terminate a contract if they asked. But I am not a dick.
She can and should provide a net proceeds calculation for you. You need to know where you are at with things.
More concerning for me is the 2 showings. Anything priced right in this market should have multiple offers the first week. Where is the condo located?
@Sheri Prather - I am with most people above maybe just start with having a conversation with the current realtor. Have you expressed concern about there being a lack of urgency. If not start there, but either way you definitely need to drop the price. IF you want it sold make it dramatic and you'll get the right amount of interest.
Also, I am pretty sure that there is no reason you can't list it to rent at the same time that you have it for sale. @Mark Ainley might know that answer for sure though.
Where exactly is the condo located?
@Michael K. that market being hot for larger units is definitely something I'm taking into consideration. However, I specifically asked to start with an aggressive number to get it sold faster. Priced it based on comps and then dropped the price. And you are correct that 1.5 months isn't too long, but it took 6 weeks to get those showings (they were in the same week). You also make a great point about maintaining relationships as I initially brought her on to help me buy a multiunit closer to Q4 and I just so happened decided to sell my place this summer.
@Joe Splitrock @John Warren I really like the idea of keeping her on to continue selling while actively getting new tenants with another agent. I always thought listing agreements meant exclusivity no matter what the transaction was so it's good to know that it can easily be amended to place a tenant.
@Brie Schmidt the condo is in the South Loop. From I'm hearing, my difficulty is coming from it being a 1 bed. And throwing tenants into the mix is adding fuel to the fire. But I agree, price is everything, so it may be that it's not priced accurately.