Leasing License Practice Exam

What does an exclusive contract guarantee the listing broker?

1. A commission only if the seller sells to a buyer

2. A commission regardless of who the seller sells to

3. No commission if the seller decides to sell independently

4. A commission only for services provided

The correct answer is: A commission regardless of who the seller sells to

An exclusive contract guarantees the listing broker a commission regardless of who the seller sells to. This type of agreement provides the broker with a secured right to earn a commission for their services as they are the designated agent for the property during the contract period. If the seller sells the property directly, to a buyer introduced by the broker, or to any buyer at all, the broker is entitled to the commission stipulated in the contract. This security of compensation incentivizes brokers to invest their resources and efforts into marketing the property effectively, knowing they will receive compensation if a sale takes place during the term of the contract. In contrast, the other options would limit the broker's commission potential. For example, a commission only if the seller sells to a buyer does not provide the same assurance of payment, and not allowing a commission at all if the seller chooses to sell independently would severely restrict the broker's ability to be compensated for their work. Thus, the exclusive contract effectively secures the broker's right to earn their commission regardless of the sale's circumstances.