One aspect of the Listing Agreement, or Buyer Representation Agreement, that seems to cause confusion for many people, is the ‘Holdover Period’. Here are a few points about what you need to know about holdover periods and how they relate to both Listing Agreements, and Buyer Representation Agreements.
Holdover Periods in Listing Agreements
The clause on this Listing Agreement is designed to ensure that should the listing expire, there would be a 45 day period during which if the Seller chose to sell the property privately to an individual or party to whom had been introduced to the property during the listing period, commission would still be payable to the Brokerage.
If someone decided to submit an offer on the property after the listing expired, and they had not been introduced to the listing whatsoever during the listing period, the Seller would not be obligated to pay commission to the brokerage. However, if for example someone went through an Open House at that property during the listing period, and then decided after the listing had expired to make an offer, within the holdover period, commission would be payable to the Brokerage.
Holdover Periods in Buyer Representation Agreements
The clause on this Buyer Representation Agreement also protects the Brokerage in a similar manner to the holdover clause in the Listing Agreement. In this case, should you be under contract with a Buyer Representation Agreement, and you were introduced to a property by that Brokerage, the holdover clause would apply for the period of time after the agreement expired.
Read the contracts that you are about to sign very carefully, and if you are unsure, ask questions. Real Estate documents are legally binding contracts, and it is critical that you are very clear on what you are signing. Consult with your Lawyer if you are uncertain.
The Real Estate Council of Ontario, RECO, has a segment on Holdover Clauses- you can read it by clicking HERE.
my property listing has expired I have a new agent .hold over period is 120 days.can I lease it
a buyer option to buy with in a year. buyer was introduced to me by the first agent.
There are a lot of variables here of which I don’t know the details, however, the Buyer could be under a Buyer Rep with your first Agent in which case that Agent would represent the Buyer in any new offer, which would be presented to you through your new Agent. Depending on the wording of your holdover clause, the new Listing Agreement should negate the old one and then the holdover clause is not applicable on that first agreement. It’s always best to check with your Lawyer whenever you are in doubt- there are so many variations and varying circumstances when it comes to real estate contracts for both selling and buying.
thanks so much for the post. If there is no number of days written into the holdover clause period dotted line (buyers rep. agreement), is there a minimum period that takes precedent or is the holdover period then considered “zero days”.
Interesting- I would always recommend confirming with your Lawyer- if there is a very commonly accepted minimum standard of a holdover period in your market place, that may take precedence, however, one would be more apt to believe that there is no holdover period if it was not specified on the contract.
Is it common for agents to accept zero day holdover?
If I do have a holdover period, what kind of proof does the agent need in order to come after the commission?
I assume includes
– Office records (buyer agents calling in to book showing)
– Open house (having guests sign name) –> What if the buyer that place an offer during holdover period did not sign their name during open house visit?
Please inform me of other ways an agent might be able to claim commission during holdover period.
How would the seller’s listing agent finds out or discovers that the seller has sold the house, during the holdover period, to a buyer who has seen the house during the listing period?
If other words, what is the seller’s proof that she/he has a valid case to ask (or even sue) the buyer to pay him/her a commission?
Thanks for your response on this question.
Hi Mike, this would be fairly simple to check on the Land Titles system- it would show the closing date as well as the name of the Buyer.
Hello! I’ve been reading your weblog for some time now and finally got the courage to go ahead and give you a shout out from Houston Texas! Just wanted to mention keep up the excellent work!