In Texas we have a form that requires the signature of both the seller and the listing agent before a listing can be correctly and technically terminated. Terminating the listing agreement allows the seller to "list with a new brokerage" without any strings attached to the previous brokerage.
Most home sellers don't realize in order to "fire your agent" you must have this document signed by all parties. You can't just call up the Realtor and yell, 'You're fired!" It's a little more involved than that.
It's rare that it happens, but the fact of the matter is every Realtor will eventually have a seller that wants to fire them. Period. You can't make everyone happy.
But how much is the termination fee and what is it?
The termination fee is typically a "mutually agreed upon" dollar amount that the seller agrees to pay the listing brokerage for services rendered.
Let's talk about Betty, the bodacious listing agent. Last week one of her sellers called and demanded she terminate their agreement because she could not tolerate the fact that Betty is a registered Democrat who was overheard at a cocktail party discussing how she believes in alien abduction. Here's the point, the REASON the seller wants to fire the listing agent is very relevant. We'll get into that further down, but let's assume Betty is a staunch believer in alien abduction and decides to terminate the listing... Betty should evaluate the situation, calculate her actual expenses and be able to articulate what her time spent equals in terms of dollars.
See Wikipedias description of the Theory of Quantum Meruit.
Here's an example:
Professional Photography: $250.00
Professional Staging: $1,500.00.
Professional Real Estate Fliers: $75.00.
The cost of the food and beverages for the open house: $50.00.
Time Spent preparing for the listing and hours "put into the listing" up until the time of termination: $4,000.00.
It's that last dollar amount that makes people unhappy. The gray area is what causes discontent, angry postings on Yelp and behind the scenes slander of the listing agent. Betty might not care, but in reality, she should.
I see no problem with going after money lost, but when it comes to "time spent" the dollar amount should be realistic and not with a lost commission attitude. Every listing scenario across the country can be different, but generally speaking, and in my humble opinion, a few hundred dollars should suffice "for time spent."
But what if Betty, the bodacious listing agent did something really terrible? Should the seller pay anything?
Here's a few examples of why Betty shouldn't get paid a dime for terminating the listing:
1. Betty goes on vacation and vanishes from her duties and responsibilities and posts countless photo's of her drunk on Facebook while Realtors are trying to submit offers on said listing, but can't.
2. She has committed an unethical act or broken the law.
3. If Betty's lack of experience, ineptness or ignorance has caused a deal to "fall through"...
4. Betty SWITCHED brokerages from company X to Company Y. Say from RE/MAX to XYZ Realty.
Here are some poor reasons to "fire your agent" or "not pay them."
1. There haven't been any offers or showings and you know your home is overpriced. Or maybe your home is in terrible condition or is just plain filthy.
2. Not enough people have shown up to the most recent open house. See the first example.
3. The listing agent died her hair a funny color and is dating a a guy that the seller hates.
4. The listing agent is rude on Facebook about Obama, Hillary and gun laws. And takes too many selfies.
5. The listing agent got fat and started smoking cigarettes.
Personal problems with your listing agent don't warrant you not paying them what they've invested into attempting to sell your home. Period. Both the seller and the listing agent should be fair in terms of financial cost and reason when it comes to terminating the listing agreement.