When I was actively listing homes for sale (that was only a few days ago since I just recently made a switch) I offered my clients what is commonly known as an "Easy Exit Listing Agreement." Basically, although each of my listings was taken for a full year, I would allow my sellers to cancel at any time with a 15 day notice - and with no cancellation fee. 

I rarely had sellers cancel a listing, so I always felt confident in offering them an easy way out. I believe that in many cases I was the chosen agent in part because the sellers didn't have to worry about being locked into a long contract. I understand that there can be a bit of fear on the part of the seller who is entrusting an agent to handle one of their largest financial transactions; what if that agent turned out to be less-than-competent? It is my opinion that as an agent, when you are confident about the level of service you provide, offering an Easy Exit Listing Agreement is no big deal. 

As the market started to decline, there was quite a bit of talk around town among agents about the length of listing agreements. Agents were being asked by sellers to take 90 day or 180 day listing agreements and hated feeling under the gun as market times crept up. Many companies started adding cancellation fees (some as high as $1500) to their listing agreements to recoup some of the marketing costs already spent on the listing in the event of cancellation. I don't agree or disagree with the idea of a cancellation fee, except when agents have adopted the strategy that real estate is a numbers game. 

I never thought of real estate as a numbers game. I told my potential sellers what they needed to hear instead of what they wanted to hear, and I encouraged them to properly prepare and price their homes for sale. If they were unwilling to work with me as a team, then I wouldn't take the listing. I'd rather have 10 listings I could sell, than 20 listings with only 10 of having the potential to sell. But some agents feel differently. They take on those 20 listings, knowing full well that 10 of them will eventually cancel or expire. They do not offer an Easy Exit Listing Agreement, and they charge a cancellation fee as well. One agent actually boasted about how he "earned" nearly $7000 over the year in cancellation fees alone! Yikes. 

There isn't an agent out there that hasn't been burned at one time or another. I've worked my tail off and spent a lot of money promoting listings that later turned into a rental instead. I've had sellers decide not to move at all. I've spend many advertising dollars that I never recouped. It doesn't happen very often, but it does happen in this business. It is part of the risk/reward of earning a commission based income. But it seems to me that some agents out there are using the cancellation fee as simply another way to make money in this business. Do desperate times = desperate agents? 

It makes me cringe. What about you? Are you seeing more cancellation fees in your marketplace? How do you feel about them?