New York Real Estate Salesperson ExaminationLaws of AgencyMedium
A buyer enters into an exclusive buyer agency agreement with a real estate broker. Later, the buyer finds a property on their own, without any assistance from the broker, and purchases it directly from the seller. Is the buyer still obligated to pay a commission to the broker?
- ANo, because the broker did not find the property.
- BYes, because it is an exclusive buyer agency agreement.
- COnly if the agreement included a protection clause.
- DOnly if the broker had previously shown the buyer that specific property.
Show answer & explanationAnswer & explanation
Correct answer: B. Yes, because it is an exclusive buyer agency agreement.
In an exclusive buyer agency agreement, the buyer grants the broker the exclusive right to represent them for a specified period. This means the broker is entitled to a commission regardless of who finds the property, including if the buyer finds it themselves.
Why the other options are wrong
- A. This is incorrect; exclusive agreements entitle the broker to commission regardless of who procures the property.
- C. Protection clauses typically extend the commission right after the agreement expires for properties the broker introduced, not for properties found during an exclusive agreement.
- D. This would be true for a non-exclusive or open agency agreement, but not an exclusive one.
Exclusive Buyer Agency
An agreement where the buyer grants one broker the exclusive right to represent them in finding and purchasing a property, entitling the broker to a commission regardless of who finds the property.
- Broker is sole representative for buyer.
- Broker earns commission even if buyer finds property.
- Creates a strong fiduciary relationship.
Memory trick: Exclusive is only one, non-exclusive is any fun.