What Happens When A Real Estate Purchase Agreement Expires

What Happens When A Real Estate Purchase Agreement Expires?

When working in real estate, you are going to deal with cases where your real estate listing agreement or the contract expires before all the paperwork goes through or before a sales offer comes in from an interested buyer. But exactly what happens when a real estate contract expires?

There are a number of reasons why this happens, but if it does, it can leave you in a pinch. A listing agreement is an agreement between the home seller’s agent and the seller about the home’s sale. It has a date on it, and if the home is not sold by that date, the contract is considered expired.

If you find yourself facing an expiring real estate contract, you need to understand what happens when a real estate contract expires, why this happens, and what you can do to rectify the problem. Failing to avoid this in the future can lead to lost clients.

Why Real Estate Contacts Sometimes Expire

For most home sales, the seller’s agent will request an exclusive listing agreement. This is a type of contract that states the name of the listing broker and the seller’s intent to work with that real estate broker and no one else. If the home does not sell by the date set in this document, it becomes an expired listing.

So why do real estate contracts sometimes expire before you can reach a closing date? Thankfully this scenario is rare, but it does occasionally happen. There are several reasons why a listing contract may expire, and these include:

A man signing a contract

1. Lack of Communication

If a contract expires because the home doesn’t get offers and sell, it is usually because the agent and seller are not communicating well. A listing agent’s job is to help the seller understand why the home isn’t selling, and that requires communication after every showing.

2. Home Priced Too High

A listing agreement can also expire if the home is listed too high. This usually happens because the seller has an idea about the price and is not willing to listen to their broker. It can also happen with an inexperienced broker who is not well-versed in the prices in the current market.

3. Poor Pictures

A real estate agent should understand the value of pictures in a listing. The National Association of Realtors indicates that 87% of buyers list photos as important in their home search. Quality photos sell houses, so don’t skimp here.

A real estate agent sitting with a couple with a contract on a table in front

Problems That Arise After a Prospective Buyer Signs a Purchase Contract

Sometimes a listing will expire because of poor pricing or marketing plan on the broker’s side, but sometimes it will expire after an offer comes in. While an offer makes it highly likely that a sale will happen, it is not a guarantee. There are many things that can go wrong between the initial contract with the earnest money deposit and the closing date.

Most sales contracts have some sort of contingency built-in. After the buyer agent and seller agent work out the terms of the sales contract and the earnest money goes to the escrow agent, a series of events begin that lead to the closing of the real estate transaction, and these are often contingencies of the sale.

Contingencies protect the buyer and the buyer’s agent, but they can create problems for the seller and the listing broker. Common contingencies include:

  • Appraisal contingency
  • Financing contingency
  • Inspection contingency

If any of these contingencies fall through, such as if the loan approval falls through, the buyer can’t finance the closing costs, or the home fails to appraise high enough, the potential buyer is no longer required to make the real estate purchase. This can cause the listing to expire without a successful real estate sale.

What Happens for the Broker if the Listing Agreement Expires?

If a listing agreement expires, the broker or real estate agent does not have the agent’s commission. It is the broker’s job to sell the home before the date on that contract.

That said, if a seller chooses to sell the home out from under the Realtor to a buyer whom the agent introduced to the property, even if it was after the listing agreement expired, the homeowner usually must still pay a real estate commission to the agent. This is due to a safety clause that most brokers will put in their listing contract.

Agents with homes nearing the end of the listing period have a few options to discuss with their buyers. These are:

  • Extending the existing agreement
  • Making a new agreement with a new price
  • Creating a withdrawn listing so that the seller can choose a new Realtor

A skilled real estate professional will know how to negotiate with a seller in this situation to keep the contract, but sometimes an expired listing means the seller will move on to a new Realtor or a new brokerage.

Two real estate agents looking over a contract

What Happens When a Seller Breaks a Real Estate Agreement

Sometimes real estate contracts fail not because of the agent, but because of the seller. However, a real estate contract with an exclusive agency or broker clause is legally binding, so it is vital to do this properly.

First, after signing a sales contract, both the home buyer and the seller usually have a 5-day review period where they can have a real estate attorney take a look at the agreement. During this five-day period, they can back out without consequences.

Second, sellers can also add contingencies to the purchase contract, which can give them the chance to break the agreement as well. Sometimes a home purchase contingency will allow them to back out if they aren’t able to find a home to buy, for example.

Finally, a seller may back out of an agreement with a purchaser if any of the buyer’s contingencies are not met. Rather than making the home comply with the contingencies, the seller can simply back out.

Otherwise, walking away from an open listing or a home that is in escrow can lead to legal consequences for the seller. The agent or the buyer has the right to work with an attorney to sue for lis pendens.

The Bottom Line About Real Estate Sales Contracts

So what happens when a real estate contract expires? If the contract expires because the listing never received offers, the seller has the right to start over with a new agent or the existing agent.

If the contract expires during the escrow period, the seller may have a way out, but working with a real estate attorney to understand the terms of the listing and sales contracts is vital protection during this time frame.

Kyle Handy

Would You Like To Partner With Me?

I’ve helped hundreds of real estate agents, team leaders, & brokers all over the country increase their sales, online presence, and create scalable systems. I would love the opportunity to work with you. Together, we can make this year your best yet!

Similar Posts


    1. Sales contract and listing agreement are two different things. If a sales contract (with a buyer) terminates, the seller is still bound by the listing agreement they signed with the list agent. If the listing agreement expires or is terminated by both the seller and agent then the seller is free to sell the home on their own. However, if the seller sells to someone who was procured during the terms of the listing agreement (even if the agreement is now inactive) they may still owe a commission to the agent, depending on how the listing agreement was written.

    1. This ability would be dependent upon the MLS system the broker subscribes to and if they have notifications setup within the system to let them know of an expiring listing. Additionally, some transaction management systems will notify the broker as well so long as the listing agreement was turned in and filed in the system with correct dates.

  1. I am the seller and get the sales agreement 5 hours past the expiration time and I sign it. Is it void or invalid because it went past?

    1. In the context of a real estate sales agreement, a purchase offer usually includes an expiration date and time, by which the seller must accept the offer or it becomes void. If the seller doesn’t respond by this deadline, the buyer is no longer legally obligated to uphold the terms of the offer. However, the seller can still accept the offer after the deadline, but this essentially creates a new offer from the seller to the buyer. The buyer is then free to accept or reject this new offer.

      In your case, if you signed the sales agreement after it expired, it does not automatically become a binding contract. Instead, your signature constitutes a new offer to the buyer under the same terms. The buyer can choose to accept your new offer, reject it, or make a counteroffer.

      Please note that laws vary by location and the specifics of the agreement could also affect the outcome. It is always a good idea to consult with a real estate attorney or professional to understand the exact implications in your situation.

    2. Wat happens if you are a seller and your house has a offer and the sales agreement expires and the buyer is not ready to close and the contract of the sale expires on the due date of the 30th of June and you don’t close on that date what an the seller do.Can the agent signed a Continuency note to extend the the past expires sale of a home.

      1. When a sales agreement expires and the buyer is not ready to close, there are a few options available.

        Extension: The buyer and seller can mutually agree to extend the closing date. This is often done through an addendum to the contract, typically called an “Extension of Closing Date Addendum”. This extension must be agreed upon and signed by both parties. The real estate agent can help facilitate this extension, but cannot sign it on behalf of the seller or buyer unless specifically authorized to do so. It is important to note that the extension period should be reasonable and clearly stated in the addendum.

        Termination: If the buyer cannot close by the expiration of the contract and an extension cannot be agreed upon, the seller may have the option to terminate the contract. The specifics of this will depend on the language in the original contract. Usually, the earnest money deposit is returned to the buyer, unless the contract stipulates otherwise.

        Enforce the Contract: In some cases, the seller might seek to enforce the original terms of the contract. This can be a complicated and time-consuming process and may require legal action.

        Remember, real estate laws and practices can vary greatly from one location to another and from one situation to another. It’s always recommended to consult with a real estate professional or attorney to understand all your options in such scenarios.

  2. What happens if the agent gets fired do to the fact of lack of communication with the seller andthat agent get fired by the seller does that agent have and more interest in that property after it takes all ads off line and listing and removing their signs.

    1. If a seller chooses to terminate their contract with a real estate agent due to lack of communication or any other reason, the agent typically no longer has any vested interest in the property. After termination, the agent is expected to cease all marketing efforts, including taking down online advertisements, removing physical signage, and halting any ongoing promotional activities.

      However, the specifics of the agent’s obligations post-termination can depend on the terms outlined in the listing agreement between the seller and the agent. Sometimes, there may be a protection period clause that states if the house is sold to a buyer who the agent had dealings with during the contract period, the agent is still entitled to a commission.

      For these reasons, it is important to carefully review the listing agreement when terminating the relationship with the real estate agent to understand any lingering obligations. If in doubt, it’s always a good idea to consult with a real estate attorney.

  3. What if the seller has head trauma and needed a POA (Power of Attorney) to sign for her But she signed with a buyer who had her house under contract for 2 months almost 3. Closing was supposed to a day . Buyer never showed to close . Seller brought her POA with her and asked that everything seller signed be handed over . Now buyer wants to lis pendens her property. seller wants to go elsewhere.buyer didn’t leave her anything and She had other liens that were not included in offer .like how does this make sense!

    1. It sounds like there’s a lot going on in this situation. It’s crucial for both parties to consult with legal professionals to ensure their rights and interests are protected. If the seller had head trauma and required a POA to make decisions, this should have been communicated clearly to all involved parties, especially when signing contracts. If the buyer did not follow through on their end by not showing up to close, it might provide grounds for the seller to terminate the agreement. However, the matter of liens and other details that were not included in the offer can complicate things. A thorough review of the signed contracts and any relevant documentation will be essential to determine the best course of action. It’s important to remember that real estate transactions can be intricate and ensuring that everything is legally sound is paramount.

Leave a Reply

Your email address will not be published. Required fields are marked *