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Switching brokers and taking sellers

By: Jim Goldsmith, Esq. on in

The salesperson seeking to move his license to a different broker “plans”. In the opinion of the broker, he “plots”.  Either way, the move is timed to enable the salesperson to reap the reward of past effort, if not more. It can also be a time of accusation and recrimination. Out of this cauldron, come some difficult ethical dilemmas.

Here’s a typical situation. Before making the switch, the salesperson is approached by a seller seeking to list her property. Maybe the salesperson has been selected because of a personal relationship or referral rather than as a result of a cold-call to the brokerage or a referral from the broker. Does he tell the seller he is switching brokers and to wait? Does he take the listing in the name of the current broker? Does he give the seller a choice? For that matter, what can the salesperson tell the seller?

Because this article is intended for REALTORS, it is likely that you are answering these questions from the perspective of broker (list now) or salesperson (list after I’ve moved). A properly and fully negotiated broker-salesperson contract (rarely seen in my experience) will provide the right answer.  (NOTE: PAR’s Broker/Salesperson Independent Contractor Agreement is a great start; terms regarding separation, the ability to take clients, and covenants against competition must, however be negotiated and terms added to the standard form).

But what about the interests of the consumer? Shouldn’t the seller have the right to hire whomever she wants? I have seen forms that put the seller on notice that the salesperson intends to affiliate with another broker and advises:

  • If the seller lists now, the seller will be contractually bound to the brokerage;
  • If the seller desires to work with the salesperson, seller may list with the broker with whom the salesperson will affiliate, and upon that affiliation, the salesperson will take over the listing; or
  • If the seller can wait, list with the new broker after the salesperson moves.

The form is signed by the seller.

What do you think…..does the seller have the right to know of a salesperson’s intended move? Must this take place in the “light” so that the broker knows the choices offered to seller? What is the salesperson’s obligations to the current broker……does he have an obligation to act in good faith to bring listings until the day of departure?

A final thought. The intentional interference with contractual relations is a legal claim and may be the basis of a law suit. A departing salesperson clearly must avoid encouraging listed sellers to break their contracts with the listing broker.  Listed sellers who seek to follow an agent should be advised to seek legal counsel.

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