From floridarealtors.org
Every listing is a new beginning. Unfortunately, not all beginnings have happy endings.
When sellers decide to terminate their listing agreement, several scenarios can result. It is essential agents handle each carefully to stay on the right side of the law and of Multiple Listing Service rules.
Canceling a listing
A listing agreement does not usually contain a unilateral right to cancel. Instead, it is a binding agreement for a specified period. (Under Florida law, it is a violation of license law if your listing does not contain a clear expiration date).
However, the Florida Realtors listing agreements have a provision titled “conditional termination.” This gives a broker the option to agree to cancel the agreement for a specified cost.
There are other ways parties may end pacts. Sometimes it is by mutual agreement, where the broker is willing to end the agreement without compensation.
To formalize this agreement, Realtors may utilize the Florida Realtors Modification to the Listing Agreement.
If a broker is amenable to the release, the seller should obtain written confirmation. Also, the listing broker must reflect the change in the MLS and mark the listing as “canceled.”
This is an essential distinction, as “canceled” signals to all members of the MLS the listing is no longer exclusively held by anyone.
A listing broker cannot force a seller to allow the broker to continue to list a property. Neither can the seller use a cancellation to walk away from an agreement.
If the seller wishes to cut ties, the seller will still be obligated to pay a commission should the property be sold during the term of the listing agreement.
Withdrawing a listing
Rather than asking to cancel the agreement, sellers may ask to suspend efforts to sell the property by instructing the listing broker to withdraw the agreement from the MLS and to stop all marketing.
Most listing services require a seller to consent in writing to these changes. The Modification of Listing agreement is useful for this function.
Sellers may “withdraw” the property at any time. However, if they withdraw with a first broker and relist with another firm, they run the risk of being obligated to pay a second commission.
Listing brokers have a responsibility to accurately portray the status of all listings in the MLS. Once a seller signs a withdrawal agreement, the listing broker should change the listing status from “active” to “withdrawn.”
The “withdrawn” status signals all members of the MLS this listing is still exclusively listed, just not currently on the market.
If a seller misunderstands the meaning of “withdrawn” (or misleads their first broker) and relists the property with another broker, there could be problems.
The other broker will be unable to enter the listing agreement into the MLS because it is already listed as “withdrawn.”