You Want to Fire Your Agent? What to Know about a Buyer’s Agent Termination Letter

First things first: Did you sign a buyer-broker agreement?

When you sign a buyer-broker agreement, depending on the type of contract, it may give the agent the exclusive right to show you properties and earn a commission on the home you eventually purchase. But you’re not truly tied to the agent until you sign an offer on a home and it’s accepted by the seller. At that point, the offer becomes the purchase agreement, and you are under contract with the buyer’s agent.

James Rhyne, a real estate attorney with Southern Law Group in Charleston, South Carolina, explains that until the buyer, seller, and agent sign the offer, chances are, you can switch agents without much headache. After you sign the offer, if the agent isn’t fulfilling their duties, you may need to write a termination letter to officially end the relationship after you’ve tried to remedy the situation.

Hopefully, you read the agreement carefully before you signed it and know the terms of termination. If not, now is the time to really dig in and read the language of the contract.

Here’s what you’re looking for:

• Length of the contract: How long are you tied to this agent? Two months? Six months? A year?
• Agent responsibilities: What responsibilities did the agent agree to, and are they fulfilling them?
• Grounds for termination: Are there actions listed in the agreement that are automatic grounds for termination?
• Manner of termination: Does the contract include specific language about how to terminate the agreement?
• Financial ramifications: Does the agreement specify a compensation amount for the agent if the contract is terminated?
• Your rights and duties: What are your rights as a buyer? What duties do you have to perform as the buyer, according to your contract?

According to Allen, “Very few agents have someone sign the exclusive right-to-represent contract, which means that the buyer is going to work exclusively with that agent.”

If an agreement is signed, it’s typically between the client and the real estate brokerage the agent is working with. So, if you’re having trouble with one agent, you could work with the brokerage to find a new agent under that same broker.

What is a buyer’s agent termination letter?

A buyer’s agent termination letter is an official letter requesting to terminate a buyer-broker agreement for reasons that could include a breach of contract, unethical conduct, poor communication, or incompatibility.

When should you write an official termination letter?

While a termination letter isn’t necessary in many situations, if you do need to write one, here’s when you should do it:

Breach of contract

Typically, your buyer’s agent will agree to show you homes in a timely fashion, communicate regularly and through your preferred method, and monitor contingency timelines, among many other duties, by signing a contract.

If the agent is in breach of the buyer-broker agreement, meaning they aren’t fulfilling the duties that they agreed to, you may need to write a termination letter so that their breach is recorded and reported to their brokerage.

Unethical behavior

If your agent is behaving in a way that is unethical and violates their profession’s code of conduct, such as discrimination, failure to disclose information, or referral kickbacks (accepting gifts from third-party service providers, such as escrow or title companies), you should write a termination letter.

In the case of unethical behavior or breach of contract, you may not get any pushback from the agent or brokerage if you want to end the relationship. However, writing a termination letter may still be a good choice because it would officially document their behavior. This would be useful if you decide to take legal action later on.

Failure to reach a mutual termination agreement

If you’ve had conversations with your agent and their brokerage about ending the relationship, it’s likely that you’ll be able to come to a mutual termination agreement without needing to write a termination letter. If you can’t, then it’s time to talk with an attorney and write a termination letter that outlines your reasons for terminating the agreement.

Lack of termination form

If your agent or their brokerage doesn’t have a termination form or process to formally end the relationship, you should write a termination letter to have an official record of your reasons for walking away.

Unable to wait for the contract to expire

When a buyer-broker agreement is signed, there is a term length that you are committing to — usually six months, but this could be anywhere between 30 days and one year. If the agent is pushing back on terminating the relationship or if you want to avoid the hassle, Rhyne says, “It’s simpler to just let the time expire.”

If finding a home is time-sensitive or if it’s a hot seller’s market and you need to move quickly, you may not be able to wait it out. In this case, a termination letter may be necessary.

How to write a buyer’s agent termination letter

Read your contract very carefully

If the friction has escalated to a point where a termination letter is necessary, the first step is to read your contract very, very carefully. Look for a termination clause that outlines the conditions or reasons you can terminate the contract. Be sure to include these reasons in your letter.

You should also consider any consequences for terminating the contract early. Examples could include paying a termination fee or still owing the agent a commission on the house you purchase within the contract’s time frame.

Find the portion of the contract that states the agent’s responsibilities to see where they have fallen short and not fulfilled their end of the contract. Take note of these and see if you can find any explicit evidence that they failed to follow the agreement.

Beware of counter-arguments

If the relationship has deteriorated to this point and your agent or broker won’t allow you to end the relationship without an official termination letter, make sure you’re aware of what their counter-arguments could be or the reasons they wouldn’t let you terminate the contract. For instance, they may point out that they’ve shown you a ton of houses and invested a significant amount of time in the process.

Consult with an attorney

Consulting with an attorney, specifically one who specializes in real estate, will help you understand your rights and the consequences of terminating your buyer-broker agreement. Contracts can often be difficult to read, so a lawyer can advise you on what exactly you need to know.

Find a good template to use

Your attorney can help you draft the letter, but you can also find example templates that walk you through how to structure your letter. Here’s what you need to include:

Send the letter

Send the letter to both the agent and their managing broker so all parties are aware of the termination and the reasons behind it. If you want receipt confirmation, you can send it by certified mail. Otherwise, an email or standard letter will do the job.

Surprisingly, it’s usually a conversation with the new agent, who reaches out to the previous agent, letting them know, ‘Hey, we talked with the buyer, and they’re unhappy and no longer interested in working with you.’

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  Jesse Allen Real Estate Agent

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  Jesse Allen Real Estate Agent at Keller Williams

  • Years of Experience 8
  • Transactions 108
  • Average Price Point $168k
  • Single Family Homes 101

Do I really need to write a termination letter? The good news

Even though a termination letter might be necessary in some cases, these situations are extremely rare, according to both Allen and Rhyne. In most cases, a phone call, text message, or email is enough to end the relationship — provided you’ve had conversations with your agent and their brokerage and tried to resolve the issues.

Rhyne says that the need to write a termination letter just doesn’t arise very often. It is a good idea, however, to obtain and keep the agent’s response that your request to end the relationship has been received and will be honored.

And get this — in some cases, you won’t actually have to do anything. If you decide to hire another agent to represent you, they might be able to assist you in firing your old one.

“Surprisingly,” says Allen, “it’s, usually a conversation with the new agent, who reaches out to the previous agent, letting them know ‘Hey, we talked with the buyer, and they’re unhappy and no longer interested in working with you.’”

If the previous agent needs compensation for the work they put in, the new agent can sometimes work out a referral fee or other compensation, leaving you to focus on your role in the home search.

Real estate agents and brokers rely on reviews and recommendations from happy clients. If you’re not happy, it’s in their best interest to let you move on rather than risk a bad review that could hurt their business. Rhyne recounts that he’s seen situations where the broker simply says, “We don’t want the bad PR. One closing isn’t worth fifty” and allowed the buyer to walk away.

Finding a new agent

Once you’ve decided to terminate the contract with your existing agent, it’s time to find a new one who will be a better fit. HomeLight’s Agent Match tool will connect you with agents in your area that could better suit your needs. It analyzes millions of home sales to find you an agent who is the best fit for you. In just two minutes, you could be on your way to finding an agent who will work with you to find your dream home.

Editor’s note: This article is for educational purposes only, not legal advice. Reach out to an advisor for professional guidance on your situation.

Header Image Source: (Mathew Addington / Death to the Stock Photo)