As far as I remember, the way it works in (northern NJ anyway) is that if a property is L/O’d then the realtor is due his/her commission on the back end, once the option is executed.
Since it’s only been listed 3 weeks (their out of pocket can’t be too bad) I’d go in and see if I could cut a deal with the broker. Might not work as they have little incentive to let the seller out of the LA.
If you try and pull a rental on them (they messed up on the LA, should’ve filled those N/A’s in) they will probably “follow” the transaction and try and collect when/if your tenant buys from you.
I have a situation I wanted to throw out there for comment. I received a call from a seller from one of my ads. Their house has been listed with a realtor for all of 3 weeks. The realtor got them for a 6 month listing, and the commission is a flat $3500. The listing agreement specifies that the sellers pay the commission even if the sellers sell it themselves. It is a 2BR row house listed for 49k. It is in nice shape, and would rent for $725-$775 per month. These folks are quite motivated, and would me take over their house sub-2, lease option, or pay cash for the house for their mortgage balance (41k). Basically, they will agree to whatever gets them out of the house without them being upside down.
Originally, I thought take over the place sub-2. I could take over their payments and get a nice cash flow by selling on a lease option. However, to do that someone would need to pay their $3500 realtor commission. I talked to the office manager and offered to buy the house if they cut the commission in half. It seemed logical to me, as they would give away half the commission if another realtor sold the property anyway. That must not have impressed them, as they never got back to me.
Now, I am considering a lease option. I could lease it for the amount of their mortgage payment. I checked the listing agreement, and it said," If the premises are rented, the seller agrees to pay the listing broker a commission of N/A and a commission of N/A on each renewal of the lease." It seems the lease option would be a way around the listing agreement. Another part which reads, “Seller agrees, to refer to broker, every person who contacts seller directly . . .” would not seem to apply as the seller contacted me, not the other way around.
My concern is the liability the seller and I could face. Can they just effectively cancel the agreement by leasing the property? While we may have a strict contractural interpretation correct, it certainly seems to fly in the face of the spirit of the agreement.