Texas Real Estate Sales Agent ExamContractsHard
A buyer's agent is assisting a client with the purchase of a home. The client signs a Buyer Representation Agreement, which includes a safety clause. The safety clause specifies a 90-day protection period. If the buyer terminates the agreement but then purchases a home shown to them by the agent during the original agreement term, and closes within the 90-day protection period, what is the agent's entitlement?
- AThe agent is not entitled to a commission because the agreement was terminated.
- BThe agent is entitled to be reimbursed for expenses, but not a commission.
- CThe agent is entitled to a commission only if the agent was the procuring cause of the sale.
- DThe agent is entitled to a commission due to the safety clause.
Show answer & explanationAnswer & explanation
Correct answer: D. The agent is entitled to a commission due to the safety clause.
A safety clause (also known as a protection period or extender clause) in a buyer representation agreement protects the agent's commission if the buyer purchases a property shown by the agent during the agreement term, within a specified period after the agreement terminates.
Why the other options are wrong
- A. The safety clause specifically addresses situations where the agreement is terminated but a transaction still occurs with a property introduced by the agent.
- B. The safety clause is designed to protect the agent's commission, not just expenses.
- C. While procuring cause is important for open listings, the safety clause in a buyer representation agreement creates a contractual right to commission under these specific circumstances, regardless of procuring cause at the moment of sale.
Safety Clause (Buyer Rep Agreement)
A provision in a buyer representation agreement that entitles the buyer's agent to a commission if the buyer purchases a property that was presented or shown to them by the agent within a specified period after the agreement officially terminates.
- Protects the agent's efforts and potential commission.
- Also known as a 'protection period' or 'extender clause'.
- Typically includes a list of properties shown during the agreement term.
- Duration is specified in the agreement (e.g., 90 days).
Memory trick: B.U.Y.E.R. - Brokerage services, Unilateral termination, Yield (commission), Exclusivity, Representation scope.