I am selling my business and signed an exclusive listing agreement with a broker in Oct of 2006. He has not showed the business once in the 6 months. My best friend is interested in buying the business and I don't want to pay the broker fees since I don't feel he has done any work to deserve it. What can I do? The agreement is one year and 10%! Thanks in advance for any help!

Hello kris:

The devil is in the details. I don't know what your agreement says. Is it an off the shelf agreement? Did a lawyer write it? His lawyer? Did you have a lawyer peruse it?

I'm going to assume that you signed the agreement the broker presented to you. Therefore, I would suggest, without having the benefit of reading your contract, that if the property is sold within the year, HE is going to get his commission.

Therefore, you either wait, give him the 10% he doesn't deserve, or hire a lawyer. None of those alternatives are cheap.

excon

What I think will happen here is you sell the business and let the broker sue you. If you can show that a) the broker did not do enough to try and sell the business and b) that the bvuyer you sold to is someone you knew prior to listing, you stand a decent chance of winning.

Thank you for the replies. I pretty much figured we were stuck. We didn't have a lawyer look at it before signing (we learned that lesson) and I think it's pretty basic off the shelf. My first idea was to have our friend wait until the contract expires and then put the sale through. Although during the next six months if the agent does bring a prospective buyer, we will run into serious issues, right?

I the agent does bring you a viable buyer and you refuse it, then sell it immediately after the agreement expires, that would likely cause you problems.

I feel like I have three options, either: 1) go to his boss and say that I am unhappy with his services and see if I can get out of the contract 2) offer him a lesser percentage since we found the sale and hope he has some scruples 3) just pay the idiot and suck it up. Or of course get sued which may cost us the same. Which you do feel is the best chance? I truly appreciate your help!

I would start with 1). Don't mention anything about finding a buyer. Just tell the boss, that you don't see any effort being made on your behalf. Tell him you want to be released from the contract or you will feel the need to take legal action. See what the reaction is. Depending on how he reacts, you may need to go to 2).

Maybe you could arrange with the buyer to become your tenant for a few months with an option to buy after the agreement expires.

Maybe you could arrange with the buyer to become your tenant for a few months with an option to buy after the agreement expires.Hello ballenger:

Nahh, that wouldn't fly. It would be a sale disguised as a rent w/option. Any good attorney would tear it apart.

The three options he lists are the only ones open to him. I think he's got the priority right too.

excon

Don't try to go around it and let him sue you, they will win plus attorney fees on both sides.

Go this route, tell him you found a buyer and want him/her to do the paperwork for 5%. Have him sign an agreement then say you offer the buyer contact info. Agents usually split the commission 5% on each side anyway, he may not be happy doing both sided paperwork for 5%, although convince him you found the buyer and think it is fair.

If not find a broker in your state to represent your friend buyer, they will earn the 5%, work something out with that broker that you the seller get a credit back of 3% or so. If your in CA our office would be willing to assist you. It is not illegal for principals to earn Earn Commissions or credit in a transaction they are principals this is why you can sell your own place by owner but not other peoples places.