Can a realtor sue for breach of contract? The answer is yes, a realtor can sue for breach of contract in the Unites States. In fact, anyone can sue for breach of contract if they sustained damages as a result of the breach.
In general, whether you are buying or selling residential real estate (a home) or commercial real estate you are likely to work with a real estate agent or realtor for your transaction. Real estate agents assist clients with a wide range of tasks including finding the right property, pricing property, home improvements or staging, marketing, holding open houses, coordinating showings, recommending other professionals such as attorneys and mortgage brokers, overseeing the inspection process, and others. Realtors work with both buyers and sellers of real estate and their tasks vary depending on whether they represent buyers or sellers.
Realtors spend a lot of time and money preparing the property for sale, marketing the real estate and advertising and for these services they are paid commissions. The real estate agent commission is typically a percentage of the sale price of the property and is usually paid at the closing of the real estate transaction. In order to ensure that the realtor gets paid when the property sells, the exact percentage of the realtor’s commission should be provided for in a contract with the client. Typically, the realtors’ commission is paid by the seller and is specified in the contract the realtor has with the seller. Similarly, the realtor for the buyer has a contract in place with the buyer which provides for the exact commission that the realtor receives when the buyer completes the purchase.
The contract between a realtor and a client is known as a real estate agent contract. The real estate agent contract gives the realtor the exclusive right to market and sell the property, specifies duties the realtor agreed to perform such as marketing, showing the property and others, and includes fiduciary duties owed to the client such as loyalty, confidentiality, accounting, disclosure, and reasonable care and due diligence. Now, any of the parties to the real estate agent contract can fail to perform their duties under the agreement which results in a breach of contract. When the realtor or the client breaches the contract, it is a nightmare that costs time, money and personal damages.
But can a realtor sue for breach of contract? Of course, a realtor can sue for breach of contract when the client does not hold up their end of the bargain. In practice this means that the realtor performed his or her duties under the real estate agent agreement and the client completed the real estate transaction but did not pay the commission as agreed or paid only part of the money owed to the realtor. In such case, the realtor can sue for breach of contract. If the contract contains an alternative dispute resolution clause that provides for arbitration or mediation as an option to resolve any conflict, then the realtor must use this option to resolve any breach. However, if the parties did not agree to an alternative dispute resolution clause, then the realtor can sue in courts for breach of contract. The remedies available for the realtor include suing for money damages or specific performance of the agreement (in other words making the client perform according to the terms of the contract or complete the payment).
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