A seller's exclusive listing agreement with Broker Yee expires on June 1 and includes a valid 90-day safety (extension) clause protecting the broker's commission for buyers introduced during the listing term. On May 20, during an open house hosted by Broker Yee, a buyer first views the home. The listing expires without an accepted offer. On July 15, the seller sells the home directly to that same buyer without involving any broker. Is Broker Yee entitled to a commission?
- ANo, because the listing agreement had already expired before the sale closed
- BYes, because the safety clause entitles the broker to a commission when a buyer introduced during the listing term purchases within the protection period
- CNo, because the seller sold the property without the assistance of any broker
- DYes, but only if the seller and Broker Yee sign a brand-new listing agreement covering this specific buyer
Show answer & explanationAnswer & explanation
Correct answer: B. Yes, because the safety clause entitles the broker to a commission when a buyer introduced during the listing term purchases within the protection period
A valid safety (extension) clause protects the broker's commission if, within the specified post-expiration period, the seller sells to a buyer who was introduced to the property during the original listing term. Here, the buyer viewed the home on May 20 (during the listing) and the sale closed July 15, which is within the 90-day window after the June 1 expiration, so the commission is earned.
Why the other options are wrong
- A. Incorrect—the whole purpose of a safety clause is to protect the broker's commission after expiration.
- C. Incorrect—the safety clause applies specifically to sales completed without the broker's direct involvement after expiration.
- D. Incorrect—a new listing agreement is not required; the safety clause in the original agreement already covers this situation.
Safety (Extension) Clause
A listing agreement provision entitling the broker to a commission if, within a stated period after expiration, the seller sells to a buyer who was introduced to the property during the listing term.
- Protects broker from sellers who wait out the listing to avoid paying commission
- Typically requires the broker to give the seller a written list of prospects at expiration
- Commission is owed even though the sale closes after the listing expires
Memory trick: The safety net catches buyers who slip past expiration.