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What Is a Protection Period?

By
Real Estate Agent with RE/MAX Compass 0524642

What is a Protection Period?

Not too long ago I got a new listing that was previously listed by a different Brokerage. When you list your home you and your agent will agree to a time-frame that the agent can market and attempt to sell the home, usually six months.

After I took the listing the previous listing agent sent me an email:


"I have a 90 day protection period with the seller, if you sell the home I want you to know that I am entitled to 3% commission."

 

Not likely.

 

Below is a portion of the Listing Agreement Texas REALTORS® are required to use when they list a home. Under E. (1) you would see the number of days agreed upon by the home owner and the Listing Agent for the Protection Period.

 

protection period

 

What the previous REALTOR® did not understand was that if the home is RELISTED the Protection Period is null and void.

So what is the protection period for? When does it apply?

The protection period prevents the unscrupulous practice of the Seller telling the buyer to come back to buy the home AFTER the Listing Agreement has expired.

Imagine a Seller listing their home with Go Get 'Em Realty for six months. The seller takes full-advantage of the exposure, marketing and advice from their REALTOR® and at first opportunity attempts to procur a buyer from those efforts and in doing so tells a buyer to come back after the Listing Agreement has expired.


A Listing Brokerage/Listing Agent can protect themselves by providing a list of buyers the Listing Agent has worked with during the six month period. If a seller relists the home, all bets are off.

Each State has their own version of a Listing Agreement and the verbiage can and probably is very different. It's important you speak to your agent and/or real estate attorney for any type of clarification when making contractual real estate decisions.

Posted by
Greg Nino
Realtor
RE/MAX Compass 
Direct & Text 7 days a wk: 832-298-8555 
 
 
Realtor since 2004
Mediator & Arbitrator for the TX Assoc. of Realtors
Member of the Professional Standards Committee for the TX Assoc. of Realtors
Arbitrator for the Comptroller's office for the State of TX for Arbitration of Property Tax Values

 Member of the RE/MAX Hall of Fame & Platinum Club

 

The information contained in this blog is believed to be reliable and while every effort is made to assure that the information is as accurate as possible, the author of this blog, and its comments disclaim any implied warranty or representation about it's accuracy, completeness or appropriateness for any particular purpose. All information is copywritten and the property of Greg Nino.  

Comments (16)

Mona Gersky
MoonDancer Realty, Dillsboro,NC - Sylva, NC
GRI,IMSD-Taking the mystery out of real estate.

Greg, it is always astonishing to me how many agents don't understand the documents they are responsible for explaining.  good luck with the new listing.

Jan 12, 2013 12:58 PM
Greg Nino
RE/MAX Compass - Houston, TX
Houston, Texas

Mona,

 

Can you imagine if every seller was responsible to pay their previous agent X% plus the commission on the new listing? HaHa. As if.

I made a simple call to the broker who, I'm afraid to say, was a little embarrassed.

Jan 12, 2013 01:00 PM
Brenda Mullen
RE/MAX Associates - San Antonio, TX
Your San Antonio TX Real Estate Agent!!

Very good explanation Greg.  I have no idea why the other Realtor didn't read the rest of the paragraph...geez, must have felt silly after you explained it to them.  

Jan 12, 2013 01:01 PM
Jordon Wheeler
The Jordon Wheeler Group - Fairburn, GA
J W Group Real Estate Sales and Service

Hey Greg,

We have similar language in our GAR Exclusive Listing Agreement about the Protected Period, but not nearly as clearly laid out as you have drawn in your post.  Another great post!  Best of continued success to you this year!

Jan 12, 2013 01:04 PM
Brian Rayl
Home Value Leads - Highland Park, TX
Active Agent and Co-founder Of Home Value Leads

Great post Greg. It is funny sad how many agents don't realize this exclusion exists. 

Jan 12, 2013 01:09 PM
Tni LeBlanc, Realtor®, J.D.
Mint Properties, Lic. #01871795 - Santa Maria, CA
Tenacious Tni (805) 878-9879

I just had this type of behavior affect me recently.  

Buyers I worked with for two years.  They could not reach agreement on a home and later decided to walk away from me and the house.  Seller rented out the home for a year and then the buyer went back bought the house.  

Can I get my two yeras back?  LOL.

Jan 12, 2013 01:38 PM
Charles Stallions Property Manager
Charles Stallions Real Estate Services - Pace, FL
Pensacola, Pace & Gulf Breeze Property Management

We would hope it works for all of us but we all know that a contract is a contract right.

Jan 12, 2013 01:39 PM
Jim Palmer
Chipola Realty - Chipley Office (850) 638-2777 - Sunny Hills, FL
Washington County, Florida

We also use much the same language here in Florida. Great opportunity on your part to contribute to this agents "continuing education".

Jan 12, 2013 08:18 PM
Liz and Bill Spear
Transaction Alliance 513.520.5305 www.LizTour.com - Mason, OH
Transaction Alliance Cincinnati & Dayton suburbs

Greg, Very similar here in Ohio, and we always explain to the sellers that the protection period is null if they list with another agent.  I think the challenge is even knowing the names of the buyers other agents brought through during your marketing efforts.  We don't have to provide a list here, but we've also never had someone sell during the protection period.  The sellers we have stick with the process and stay in MLS if they're truly serious about getting their home sold.

Jan 12, 2013 08:37 PM
Loreena and Michael Yeo
3:16 team REALTY ~ Locally-owned Prosper TX Real Estate Co. - Prosper, TX
Real Estate Agents

That's how I understand Protection Period too. Once the house is re-listed with another broker, the Protection is null and void.

Jan 12, 2013 09:00 PM
Don Barrett
Integrity Real Estate Services - Idabel, OK

Greg, we have a similar clause.  It's not called the Protection Period but the agreement survives the end of the listing, for a named period of tiem,  if the seller sells to someone that the listing agent has worked with on the property  UNLESS the seller lists with another broker. 

Jan 12, 2013 09:48 PM
Sussie Sutton
David Tracy Real Estate - Houston, TX
David Tracy Real Estate for Buyers & Sellers

Well your explanation is how I understood it to work. I feel sorry for the mis informed Realtor. I am sure the Broker is going to have to have a little class with this person. Maybe the broker should have a contracts class period.

A little refresher course can never hurt.

Jan 13, 2013 06:21 AM
Doug Rogers
RE/MAX Coastal Properties - Destin, FL
Your Real Estate Resource!

You can't fix stupid. Honestly that is more than a "rookie" mistake. One would have hope the prior listing agent would have ran this past his broker prior to calling you.

Jan 13, 2013 08:07 AM
Richard Weeks
Dallas, TX
REALTOR®, Broker

Amazing how many agent do not understand the forms we use.  15 hours of MCE every 2 years might not be enough for some.

Jan 21, 2013 10:36 PM
Wayne Johnson
Coldwell Banker D'Ann Harper REALTORS® - San Antonio, TX
San Antonio REALTOR, San Antonio Homes For Sale

I guess one can come to an erroneous conclusion when the entire document is not read.

Jan 25, 2013 01:22 AM
Ron Fowler
Fowler Copywriting - Vancouver, WA

Great explanation, Greg, looks like the agent didn't bother reading the entire contract himself.

Jan 27, 2013 02:55 AM