Etobicoke Real Estate

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What does the “Holdover” period mean anyway?

I have found there is some confusion as to what the “holdover” period means in a listing agreement. A common holdover period is 90 to 180 days but some Listing Agents are making it as long as one year. If a buyer who was shown or introduced to a property when it was originally listed later approaches the seller directly once a listing expires or is otherwise terminated, and purchases it during the holdover period, the listing brokerage may make a claim for commission. As well, if a seller re-lists a property with a different brokerage and sells it to someone shown or introduced to the property during the original listing period, the first brokerage may make a claim for commission – but only if the commission on the new listing is less than it was in the previous listing. Most often, the claim would be limited to the difference between the two amounts.

If the eventual buyer was not shown or introduced to the property during the original listing’s term, no claim for commission can be made. Moreover, if negotiations begin between a buyer and seller during the listing’s term but conclude after the holdover period’s expiry, it is more likely that a court would find that the contract was outside the holdover period, and a claim for commission would be less likely to succeed.

All commission terms are negotiable. The exact wording and time limit of the holdover period in a listing agreement can vary so the time period is left blank until the salesperson discusses it with the client. No maximum or minimum limits exist – it can last any duration, as long as the client consents after being fully informed.

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