The Blog

It’s not uncommon for a real estate agent to move his or her license to a new brokerage when there is a real estate transaction in process. However, many agents wonder how this works? Does I transfer my listing? What happens to the previous listing brokerage? Will the agent actually earn a commission at closing if the listing is not transferred?

The California Association of Realtors® has the answers to these questions and many more on their website. There are a lot of factors that need to be considered when moving your license if you have transactions in process. So many factors, in fact, that the CAR® legal team has quite a bit to say about changing brokerages and what happens with any listings or sales currently in process. Below is an abridged version of the legal team’s FAQs on the matter. For further information, visit car.org:

Q: Does a listing agent have the right to transfer the listing to a new broker after the brokerage relationship with the [current] broker is terminated?

A: Generally no. The listing is a contract between the broker and the seller. It is not between the sales agent and the seller. Therefore, it is the broker that retains the listing. Inducing the seller to cancel one listing and sign another, even if done by the agent that obtained the listing originally, is likely to be an intentional interference with contractual relations.

Q: Under what circumstances might a listing agent have the right to transfer the listing to a new brokerage?

A: It is possible, although not common, that the broker could agree in the independent contractor agreement to allow the sales agent to take listings from the broker to a new company when the sales agent terminates the brokerage relationship. This agreement could be at no cost to the sales agent or conditioned on the payment of a referral fee or other fees for transferring listings.

Q: If the broker agrees to let the listing agent transfer a listing upon termination, how should this be accomplished?

A:  There is no single way to accomplish this. But no matter how it is done, it is important to realize that first and foremost the agreement to transfer the listing is primarily between the current broker and the new broker. And secondly, there is presently no form on zipForm® designed for this purpose.

The brokers are advised to consult an attorney in drafting such an agreement.
The former broker should also require the seller to sign a Cancellation of Listing (CAR form COL) as a condition of the transfer.

An agency disclosure must be delivered beforehand (CAR Form AD). After the listing is signed, a new confirmation of agency relationship form should be signed by the seller and delivered to the buyer. (Use CAR form AC for this purpose).  Lastly, the MLS information should be changed to reflect the new listing broker.

Q: That sounds terribly complicated. Can’t we accomplish the transfer of a listing by simply having 1) the brokers sign a referral fee agreement and then 2) having the client sign a new listing with a new AD form?

A:  As stated in the previous question, there is certainly more than one method to accomplish a transfer of listing. And the method (as described in the question) would likely work, but there are a lot of details left unstated. For example, there is no hold harmless provision in this method. Or what happens if the new broker doesn’t pay the cooperating broker? Or what if the seller does not consent to the new broker working on the transaction? Generally you want a more detailed and formal agreement as a way of dealing with worst case scenarios, which typically do not materialize.

Q: If a broker does not agree to transfer the listing after a listing agent resigns, who then handles the listing or pending transaction?

A: The ICA states that the broker will make arrangements with another agent within the office to work the listing and conclude pending transactions, or the broker may do the required work (paragraph 8F of the ICA).

Q: If a broker does not agree to transfer the listing after a listing agent resigns, what commission, if any, is that listing agent entitled to?

A: The amount of commission the listing agent will be entitled to will be determined by the terms of her or his independent contractor agreement with the former broker. The CAR independent contractor agreement states that if a broker assigns a new agent to finish out the listing (or the broker herself or himself does the work) that person is entitled to be reasonably compensated for completing the work. The broker may then deduct that amount paid to the new agent from the full commission that the original listing agent was promised (paragraph 8F of the ICA). The original listing agent is entitled to the balance.