Keys & Credit

The Insider's Guide to Canceling Your Real Estate Contracts

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Ever felt trapped in a relationship with a real estate agent or lender who isn't meeting your expectations? You're not alone—and contrary to what many professionals want you to believe, you're not stuck either.

Breaking free from unsatisfactory professional relationships in real estate doesn't require waiting for contracts to expire. Hidden in the fine print of your agreements lies your ticket to freedom. Minnesota's Chapter 82 mandates that cancellation terms must be included in contracts, though they're typically buried as a single line stating the agreement "can be canceled only in writing." This simple statement is your leverage when service falls short.

Mortgage relationships offer even more flexibility. Unlike real estate agreements with formalized contracts, pre-approvals can be canceled with a straightforward email. However, this ease of transition comes with downsides—particularly regarding your personal information. When lenders perform traditional "hard" credit pulls, credit bureaus often sell your data to competitors, triggering an avalanche of solicitations. Some unscrupulous operators even pose as representatives from your original lender's team, attempting to poach your business through deception.

The real estate and mortgage industries operate with many unspoken rules and profit-driven practices that consumers rarely see. From the selling of your personal data to predatory sales techniques, understanding these behind-the-scenes mechanisms empowers you to navigate the homebuying process more confidently. Remember: everything is negotiable, from contract duration to cancellation terms, and you always maintain the right to choose representation that genuinely serves your interests.

Ready to take control of your real estate journey? Share this episode with friends navigating the homebuying process—because knowledge truly is power when it comes to protecting your largest investment.

Speaker 1:

Welcome to the no Fluff, no Nonsense Real Estate Mortgage Podcast.

Speaker 2:

I'm Barb.

Speaker 1:

Oh sorry, delete. Start over. Welcome to Keys and Credit your. No Fluff, no Nonsense. Real Estate Mortgage Podcast. I'm Barb, your straight-talking lender. I am Bill, your no-bullshit realtor.

Speaker 2:

Okay, so today we're going to come back to a few things we talked about in our audio episode three or four, whatever it was. It was, um, breaking up with your realtor, right? What do we call?

Speaker 1:

it it's it's not me it's actually you.

Speaker 2:

It's actually you, this is your fault. So, uh, full disclosure. We are going to ruffle feathers today. We're gonna piss people off. I mean, the point of this little segment is to rock the boat.

Speaker 1:

So right, we'll let our potential clients know that if they are not happy with the service they're getting, that they could break up with their realtor and or there is a way and doing this now too.

Speaker 2:

We realize that some people might realize like, oh man, there's bill and barb out there. We want to cut ties with this crappy agent that we have and maybe call them. So we are governed by as agents, not as lenders. Okay, as real estate agents, we're governed by Chapter 82 in Minnesota statutes. Okay, chapter 82 states that if there's a cancellation term in the contract, it has to be clearly stated and the cancellation terms need to be clearly stated as well.

Speaker 2:

So in 82, subsection 2, subsection 4, the cancellation of a contract states a clear statement explaining the agreement may be canceled and the terms under which it may be canceled. So in our contract here, which will be up on screen right Eventually, line 122, this is the only spot in this contract where it talks about a cancellation. It's one line that's buried in here it says this contract can be modified or canceled only in writing, signed by buyer and broker, or by operation of law. End of statement. So, just so people know, you can cancel your buyer's broker agreement with your agent. You just have to let them know in writing.

Speaker 1:

So you said within there that it has to be signed by the buyer and the broker. So what happens if the broker doesn't sign?

Speaker 2:

Then you have to either let the contract expire Okay, right, which? Another thing too, too when you're looking at these contracts, make sure you're paying attention to the time frame. Okay, coda, you might be running into this soon because you're buying a house um, if they're trying to give you a year term or a two-year term or something of that nature, cut it down to six months. Cut it down. They can change the term. You can change anything. Anything in this contract can be negotiated. Everything, even the boiler, this contract can be negotiated. Everything, even the boilerplate stuff can be negotiated.

Speaker 2:

So if there is an agent that's trying to push this year-long thing, maybe you want to cut that down, because if they don't want to cancel, technically they could string you out. But if you go to their broker so I work for Remax Results. So if you go to Remax and say, hey, you know what I want to cancel with Bill, most of the time my broker will come in and say Bill, send him a cancellation. If it's me being your representative and you tell me you want to cancel, I'm canceling. I mean, I'm fired. That's how that works. But you are not locked into these. There is an out. You just have to figure it out and agents aren't going to tell you. That's the problem, that's the problem right now.

Speaker 1:

And on the lending side, um, to get out of a mortgage, like a pre-approval application, people will call me and be like well, but I am pre-approved with abc lending. If they're feeling like they don't want to work with them, they just have to send them an email and say I am going to cancel this and take my business elsewhere. And they have to because you've given them in writing that you're done.

Speaker 1:

You can't sign a representation contract under lending right, correct, but if you want to cancel, cancel like we've sent you the documents, you've signed them. You can just send an email and say I want to cancel, and then yours is done, and then I'm done, and then you're done. But if you have had an appraisal ordered, that's always paid for. If it's completed, okay. But everything else you can cancel.

Speaker 2:

You can cancel, you can cancel up so when it comes to closing, yeah, so when it comes to lending side send an email.

Speaker 1:

It's just an email.

Speaker 3:

Barb's fired she's out of here, right? So, uh, just quickly to interject. If I get a pre-approval through you and I want to get a pre-approval through someone else, all I have to do is literally just send an email and say, hey, I don't want to use you.

Speaker 1:

Correct If you got pre-approved through someone else.

Speaker 3:

What happens if I don't? What if I get pre-approved through you and then I go to someone else and get pre-approved through them and then just continue the process through?

Speaker 1:

them. That's fine, you're done, that's fine. So on the lending side it's a lot more relaxed, you're not? Necessarily locked in If you're down the road. You've found a house, we've sent you the documents and, for whatever reason, you want to cancel because you're going to whomever, you can just send it I have a question Can other lenders contact your buyers even though you're the one helping them get a loan?

Speaker 2:

Does that make sense?

Speaker 1:

Well, they can contact whomever, but if the loan is locked and what do you mean?

Speaker 2:

the loan's?

Speaker 1:

locked. Locked the interest rate.

Speaker 2:

Okay.

Speaker 1:

And then someone comes in and says hey, you know, work with me, Because that loan is already locked and we're already hedging those funds. Potentially they could go after that other Lender for their commissions. Okay, Because we have hedged those funds, so we have incurred costs.

Speaker 2:

But it's okay for another lender say a local lender, because we don't want to say too many names here, we threw one under the bus a couple times. We'll say a local lender, say you pre-approved somebody, we find them a house, we get under contract and a local lender calls and says hey, you know what, we should try my mortgage instead of Barbara's mortgage because it might be better. That's completely legal, right, not saying they're going to do it, but that's okay, that is okay, okay. So on the agent side, that is hugely grossly illegal.

Speaker 3:

Can you plead ignorance? As a realtor let's say you reach out to a buyer it's like, hey, I heard you were thinking about buying a house.

Speaker 2:

So in our code of ethics, our first question for anybody when it comes to real estate is are you represented? Do you have an agent? Are you working with anybody? That should be the first question. So let's use an open house as an example. Okay, people walk into an open house. They're customers. Okay, there's a different agency representation there. They're customers. If we don't ask them, are you represented? And we start talking to them about price terms, motivation, we're instantly in trouble if they have an agent.

Speaker 2:

So it's our responsibility as agents to make sure we're following the law, because they don't know what the law is, right? So when people think they're locked into these contracts and they call their agent that they're under contract with and say, hey, can I cancel it, they're like, no, you know, we're in it for six months, which is a true statement. You're in it for six months they're not going to tell you about line 122. You can cancel your buyer's agent representation, right? The only way to get good information on how to do that is to contact another agent. Here's the loophole with that.

Speaker 2:

If you're represented say you're represented by one of the agents around here, okay, I can't call you and tell you how to do it. If you called me and said Bill, I hate my agent, how do I cancel? I can give you an idea how to do it. You know what, cody? Look at your contract, pull up you know line 122 and see what that says. That could probably help you out, but I can never call you back. I can't send you a text message. I can't send you an email until I know your contract is canceled. But you can call me as many times as you want, right, it can only go one way. When you're under representation Versus lending, they can get bombarded by a thousand different people with no trouble, and you will.

Speaker 1:

And you will.

Speaker 2:

Oh, you absolutely will. When you're under contract with an agent, the reason your phone doesn't ring with a thousand other agents because it is illegal, completely legal department of commerce would light us on fire.

Speaker 3:

John colopy would kick my ass, he would you know, I feel like there's a lot of agents that just don't do that. In general, though, I mean like there's not a lot of cold outreach from real estate agents, a ton of cold outreach from lenders I mean I still to this day get emails from when we bought our first house, when we were.

Speaker 2:

There's a database isn't there when somebody goes in. Okay, let's talk about that. We might completely screw this whole thing up.

Speaker 1:

Or change it up, or change it up.

Speaker 2:

So when you used to pull credit, you would do a hard pull. We had this conversation years ago, right Right Now. We do soft, you do soft. Why do you do soft?

Speaker 1:

pulls To reserve the client's credit score throughout the lending process until they're under contract.

Speaker 3:

And to kind of curb the other phone calls right, right Because as soon as somebody.

Speaker 2:

There's this weird program out there who knows what it is, but there's this weird thing where, as soon as Barb pulls your credit as a hard pull, every lender on the planet and on Mars and in Jupiter gets it and they're calling you, they're sending you emails.

Speaker 1:

And the reason why is the credit bureaus. They sell your information, so they sell it to other lenders and then you'll get these solicitations from them, not just other lenders, because you also will get spam mail. Oh yeah, From everybody.

Speaker 3:

Home warranties and things like that that you should not they're like a bunch of swirling fucking sharks around like chum.

Speaker 1:

As soon as something happens, they all just start coming in, you know so even I just heard today someone got something in the mail about getting a copy of their deed and they bought seven years ago and they're even putting it on like fancy green paper okay, and making it look really formal the deed and then saying hey send me 99 and we'll get you a copy of your certified deed.

Speaker 1:

You can first of all get a copy of it from the county. You should have it in your closing packet and whatever title company you used, we'll have it forever.

Speaker 3:

It's a scam and we'll send it forever. It's a scam. It's a scam and we'll send it to you.

Speaker 1:

It's a scam, so don't ever fall for it. Good to know. If it smells fishy. Don't do it, Yep. And if you have a question, call the title company you worked with, call the realtor you worked with, call the lender you worked with.

Speaker 2:

It's funny when you took off Barb because she goes on tangents. Don't let her lie on.

Speaker 3:

Tangents to Fill in.

Speaker 2:

Her Life.

Speaker 3:

You will never get a piece of mail in the mail from Barb that says pay me $99 for an extra dollar. Never, ever, never ever. It'll look like it came from me.

Speaker 1:

It'll say guaranteed rate underwriters. If you did a loan with me, it'll look like it, but be careful. So anyways, back to credit polls. So the credit bureaus? They do sell your information to other lenders. So you don't sell it and you don't give it to other people, and that's why you guys switched to a soft pull.

Speaker 2:

Correct, because you don't want that shit to happen or that stuff to happen to your people.

Speaker 1:

Well, who wants to be bombarded? Yeah, like when they're in the process.

Speaker 2:

There's so much stuff.

Speaker 1:

But, the other thing you've got to be careful of. They are sharks and so they can be really good imposters and insinuate that they're on my team. And so I coach my clients like, if you get a call, first of all, here's my team players. My processor's names are this they're going to call you. They're going to call you from this phone number. They'll email you from this email. But if someone calls you and their name isn't on this list, they're not on my team. So don't let them tell you they're on my team, because they will insinuate when you say, oh gosh, I'm working with Barb, and they'll be like uh-huh, yep. I had a client got a call after a hard credit pull and this person, this imposter from another lender, said, oh yeah, I work on our team. And then he paid that person 20 bucks to have their credit pulled what you know.

Speaker 3:

one thing to keep in mind legal like, oh yeah, totally, it's just a scam. I mean one thing too that you got to keep in mind it's like I've always been told that if a service is free, you are the service you know, like social media, the credit bureaus, like, if you're not paying to use the thing, you are what's?

Speaker 1:

being transacted.

Speaker 3:

They're using you for their current Social media is a great example If you're on Facebook, it's completely free to be on Facebook. They're selling your information. But, you're getting sold. Your data is being sold.

Speaker 1:

Oh yeah. Well, for example, if all of a sudden I said, hey, I want a side-by-side, all the ads are going to come up on my Facebook feed for side-by-sides. We're buying a side-by-side on Monday.

Speaker 2:

Just so everybody knows, don't put that out there, she might get mad at me. It's a used one to do that because us in the sales I don't know area, market, whatever it is they call it salespeople and not representatives. Most agents are trained in the craft of how to trick you and how to get you to say yes and how to get you to do certain things and manipulate you in ways to where you don't usually do what you want to do. They're trained in that. So if we had access to the stuff lenders had access to, you guys would be in deep shit, because you have all of us I'm not saying me, but most of us that are out there. I mean, they're sharks. They are sharks or they're wolves is what they call them in our CE class as wolves they're chasing sheep.

Speaker 1:

I'm really glad I don't work for one of those lenders that would have to call these people that had a credit pull. Could you imagine People are going to hang up on me and be like what I'm working with ABC Mortgage or the cold calling shit. It's cold calling right, I mean that's one thing Results, doesn't.

Speaker 2:

They don't make us do anything, right, but cold calling. Imagine me calling and saying hey, this is Bill with Remax. Do you want to sell your house today? Click. They're never going to call me ever again. No, you know that's just silly. But if we had like what I'm saying, if we had access to when anybody signed up with an agent and all of a sudden they showed up in our database, you'd have 300,000 phone calls within 20 minutes. You really would.

Speaker 2:

If a listing cancels. This happened to me down in St Paul. I had a listing canceled, not because they were disappointed or anything like that. They canceled because life changed. Like we said before, life happens. We canceled and the agents seen that it canceled officially. They are not under contract, they're not represented anymore, and it was days and days of nonstop phone calls from all these wolves or sharks or whoever trying to get their business, and that's why it's illegal for us to do that when you're under contract. But there's a way to get out of it. If you find Bill and Barb or Barb and Bill, you can get out of it and you can come to us.

Speaker 1:

If you found this helpful, share it with a friend. Leave a comment below. It helps more than you can think. More than you can think.