I wanted to pass this on to you. It's a clause that I am having my agents put in all of their listing contracts during this market cycle. Maybe forever. I have found that when doing a listing with a Seller, they are more likely to help keep their end of the bargain if they have something vested themselves. Use it if you want...here's my permission!
Throughout the years, I have found that if Sellers approach the listing process with a "What the heck, it's not going to cost me anything..." approach, you will end up losing money in the long run. Listings, when property marketed, cost money. There's sign placement, printing, advertising, open houses, etc... Then there are wasted showings where the Seller "doesn't find it convenient at the time" or cannot be bothered to answer a showing request for some unknown reason.
A Listing Agreement is NOT a One Sided Deal!
HOWEVER, a Listing Contract is a contract. That means it has parts for all the parties to perform. If a party does not perform to his or her part, there are consequences. For so long, the brunt of the consequences have fallen upon the Listing Agent, weather the default has been on the part of the Principle(s) or the Agent.
Therefore, here at Rocky Mountain Realty in Colorado Springs, CO, we have started putting this clause in all of our Listing Contracts:
"In the event the Seller opts to cancel or withdraw this listing before it's term, the Seller agrees to pay the Listing Broker a fee of 500.00 OR actual documented marketing expenses, (whichever is more), within 30 days of termination of this contract. This fee will also be paid by the Seller in the event that the Seller is unwilling to show the property during reasonable times as outlined in this agreement, or in the event the Seller fails to perform to the specifications contained in this agreement."
After all, guys, our consequences take up the remaining 5 pages of the agreement, don't they? I have yet to have one person refuse to sign the agreement. Instead, when I read through the paragraph, I explain, "We have developed this policy because there have been some Sellers, believe it or not, who have caused us to spend all sorts of money on their behalf, only to cancel the listing or refuse to show". They invariably say, "Well that sounds reasonable" or "That's only fair."
Anyway, I think we should all work hard...but then we should ALWAYS get paid something.