California Real Estate Broker ExaminationContractsMedium
A real estate agent is preparing a listing agreement for a seller. The seller insists on a clause stating that they will pay a commission only if the agent finds a buyer AND the seller approves the sale. If the seller finds a buyer themselves, no commission is due. What type of listing agreement is this?
- AExclusive right-to-sell listing
- BNet listing
- COpen listing
- DExclusive agency listing
Show answer & explanationAnswer & explanation
Correct answer: D. Exclusive agency listing
An exclusive agency listing guarantees the agent a commission if any agent or the listing agent sells the property. However, if the seller sells the property themselves without agent assistance, no commission is due.
Why the other options are wrong
- A. An exclusive right-to-sell listing guarantees the agent a commission regardless of who sells the property.
- B. A net listing specifies a net price the seller wants to receive, with the agent's commission being any amount over that price, which is generally disfavored and illegal in some states.
- C. An open listing allows multiple agents to sell the property, with only the procuring cause receiving a commission, and the seller can sell it themselves without obligation.
Exclusive Agency Listing
A listing agreement where the seller retains the right to sell the property themselves without paying a commission, but agrees to pay the listing agent if any agent or the listing agent sells it.
- One agent is authorized to sell
- Seller can sell independently without commission
- Agent receives commission if they or another agent find the buyer
Memory trick: Exclusive Agency: 'Agent gets paid, unless I sell it myself.'