How Long After a Real Estate Contract Expires Can an Owner Sell Privately?

Understanding Real Estate Contracts

A real estate agreement, or listing contract, is a legal document that binds you, the seller, to the real estate company or agent who will help you sell your home. 

This listing agreement lays out the expectations and responsibilities for both parties during the sale, ensuring that everyone understands their roles and obligations. There are several types of listings, each with their benefits as described below: 

Open Listing

An open listing agreement allows an agent to list and advertise your property without giving them exclusive rights to market and sell your home. 

As the seller, you are the only one with the right to sell the home and don’t owe a commission to the realtor. This agreement is less common and typically used when there’s limited interest in the property.

Exclusive Agency Listing 

This real estate listing agreement binds you to a single real estate agent or brokerage. However, it still allows you to find interested buyers on your own. Exclusive agency listings are unpopular among real estate agencies, and they often don’t offer them because their efforts could be wasted if you sell the property under For Sale By Owner (FSBO). However, if the agent’s efforts result in a sale, you would pay them a commission.

Exclusive Right-to-Sell Listing

This is the most common listing agreement with a new real estate agent. With this option, you give the agent the exclusive right to market and list your home on a multiple listing service (MLS). You won’t be working with any other real estate agents and can’t sell your house independently since you’re bound to the realtor. 

During this period, the agent is responsible for listing, advertising, and marketing your property to generate buyer interest and offers. The real estate agent earns a commission on any sale during this time, no matter who buys the property.

Net Listing

A net listing is an agreement in which you, the homeowner, set a specific amount you want to receive from the sale of your home. Once a sale is finalized, any amount over that set price goes to the agent. 

So, the real estate agent keeps the difference if the house sells for more than your asking price. In this type of agreement, the agent doesn’t earn a commission from you; they keep whatever extra they can get above your set price.

Unfortunately, most states view net listing agreements skeptically and consider them illegal. Currently, they are only allowed in Texas, where specific rules protect sellers and prevent conflicts.

What Happens When a Real Estate Contract Expires?

The length of real estate listing agreements can vary depending on what you and your agent prefer. Typically, agents present an average listing agreement that runs from three to six months in Texas, though some can last up to a year. 

After real estate listings expire, homeowners should reflect and reassess. Start by considering the feedback on the home’s condition and price. This information will help you adjust your strategy. 

If your home had few showings or no offers, you should change the marketing strategy or even consider a different real estate agent. People often choose to go with a new listing agent because they can provide fresh perspectives, new resources, and a renewed strategy for the selling process. 

Also, temporarily taking the property off the market would be a good idea. This allows homeowners to improve their property while waiting for favorable market conditions. When you eventually relist your property, you’ll find that a new listing can pique the buyer’s interest.

How Long After a Real Estate Contract Expires Can an Owner Sell Privately?

In Texas, you typically need to wait about 90 days for the protection period to pass after the listing agreement expires. This period is part of the protection clause included in most listing agreements, which ensures agents are protected if the seller sells to a buyer they introduced to the property. If you sell your home right after the listing expires, you might owe the previous real estate agent a commission for a “tail period” specified in the clause.

Factors Affecting the Expiration of Real Estate Contracts

Before you list your house again or sell to a cash buyer, you must understand some of the possible reasons you didn’t have a successful home sale the first time.

Unreasonable Pricing

Experienced real estate agents know that setting the right price is crucial for a successful sale. However, if you’re working with a new, inexperienced agent, they might list your house above market value, which can deter potential buyers. Alternatively, if you ignored your real estate agent’s pricing suggestion and insisted on a higher price, this could also have been a problem.

Poor Communication

Clear and constant communication is essential when listing your home. Before signing an exclusive agency listing, it’s important to find the right agent, someone you have confidence in and feel comfortable working with. Not all real estate agents and sellers are the same, so finding a good match is key to a successful sale.

Poor Photography and Staging

Many buyers use online tools to find properties. If your agent used low-quality photos, your home likely didn’t get much attention. Similarly, if your house wasn’t well-staged, the photos would highlight any flaws, making it less appealing to potential buyers.

Lack of Exposure

Open listings often fail due to insufficient exposure. The success of your real estate listings depends on your agent’s marketing efforts. You must ensure that your agent actively promotes your property in the market.

Effective marketing is crucial, especially in a competitive buyer’s market. Some agents fail to market effectively because they lack the right tools, market understanding, or promotional strategies, which can cause the real estate listings to fall through.

Factors Beyond Your Control

Sometimes, no matter how great your real estate agent is, certain factors beyond your control can affect the sale of your home. Here are some examples:

• The property is far from restaurants or shopping malls.
• There is no available parking space.
• The house lacks natural light.
• The property is in a flood-prone area. 
• There was a death on the premises.
• The neighborhood or neighbors are noisy.
• The house is in a busy area.

Steps to Take After a Real Estate Contract Expires

Renew the Agreement With Your Agent 

If you still trust your real estate agent, consider extending the listing agreement or drafting a new one. This time, try addressing any previous mistakes that have turned potential buyers away. You could change your marketing strategy, take new photos of your home, repaint walls, etc.

Find a New Agent

Don’t sign another listing agreement with an agent if they haven’t met your expectations. If your current real estate agent has shown signs of poor communication, unethical behavior, or not acting in your best interests, it’s time to find a new one. Choose a professional based on their reviews, sales history, and success rate.

Get a Cash Offer

If you don’t want to relist your property, consider selling to a cash buyer. This process is straightforward; you won’t have to pay commissions or other agent-related expenses.

List the House Yourself

If your realtor doesn’t sell your house and the listing expires, you might be tempted to list it “For Sale By Owner” (FSBO). While you might find a buyer this way, statistics show that FSBO sales are generally less effective. You’re likely better off with the other options.

Selling Privately After a Contract Expires in Dallas

Understanding the Protection Clause

Most listing agreements include a protection clause to ensure that real estate agents are compensated for their work even if the sale happens after the listing agreement ends. Ignoring this clause can lead to legal and financial complications, so knowing its terms is crucial.

Impact on Private Sales

If you decide to sell your house privately during the protection period, ensure that your previous real estate agent did not introduce the buyer. Otherwise, you will still be obligated to pay the commission. It’s advisable to keep detailed records of all showings and potential buyers introduced during the listing period to avoid misunderstandings.

Local Guidelines for Selling Privately After the Protection Period in Dallas

Once the protection period has passed, you can proceed with a private sale without owing a commission to the previous agent. Here are some guidelines to follow when selling privately in Dallas:

• Understand the local real estate market and set a competitive price for your home. 
• Make necessary repairs and improvements to make your property more appealing to buyers.
• Market your home through online platforms, social media, and local listings.  
• Ensure all legal paperwork is in order. 
• Be prepared to manage showings and negotiate with potential buyers. 
• Once you find a buyer, you must manage the closing process. 
• You will coordinate with the buyer, their lender (if applicable), and possibly a title company to ensure a smooth transaction.

While the FSBO process may seem daunting, there are examples of success stories from which you can draw inspiration. The important thing is not to lose hope and to be consistent in your efforts. 

Conclusion

Finding your house still on the market after an expired listing may be disheartening. Reevaluating your real estate agent’s abilities, pricing, strategy, showing feedback, etc., will provide you with valuable insights on where you might be lacking. 

If the fault is with the real estate agent, you may have to wait until the listing expires before you consider selling your house again. 

During this time, you should adjust your strategy and improve your house’s condition so potential buyers will view it with renewed interest. Hiring a new agent might also help if you consider selling your house for cash.  

Additional Resources

If you’re looking to sell your house quickly in Texas, contact A-List Property for a quick and hassle-free cash offer! Serving Dallas, Fort Worth, Austin, Houston, San Antonio, and the surrounding areas, they provide a seamless selling experience.

Frequently Asked Questions (FAQs)

What is the standard waiting period after a listing expires in Texas?

A typical waiting period lasts up to 90 days, during which the owner cannot sell the home due to the protection clause. 

How long does a standard real estate listing/contract last?

The terms of a real estate listing can vary depending on your and your agent’s agreement, but typically, an agreement lasts three months to a year. 

Can you sell immediately after a listing agreement expires? 

Due to the protection clause period, owners are not allowed to sell immediately after a listing expires. If a homeowner breaks this clause, they owe the agent a commission and may even have legal repercussions. 

Contact us today for a no obligation consultation to discover how to sell your house quickly and easily in Texas!