Under an exclusive agency listing agreement, when is the listing agency entitled to a commission?

Under an exclusive agency listing agreement, when is the listing agency entitled to a commission?

• A. When the seller terminates for cause
• B. When the seller procures his own buyer
• C. When another company procures the buyer
• D. When the home is destroyed by fire

Answer: (C)

The correct situation in which the listing agency is entitled to a commission under an exclusive agency listing agreement is when another company procures the buyer. In this type of agreement, the seller retains the right to find a buyer on their own while also allowing a listing agent to represent the property. If the seller finds a buyer independently, they can avoid paying the commission to the listing agency. However, if another company, acting as a cooperating broker, brings in a buyer, the listing agency is entitled to a commission because they are the ones who secured the exclusive agreement and facilitated the listing. Thus, they have the right to compensation for their efforts when a transaction leads to a sale, even if it is not made directly by them. The other scenarios, such as the seller terminating the agreement for cause, or the seller procuring their own buyer, do not result in a commission being owed to the listing agent. Similarly, if the home is destroyed by fire, the listing agreement itself would typically become void, negating the listing agency's entitlement to commission.

The correct situation in which the listing agency is entitled to a commission under an exclusive agency listing agreement is when another company procures the buyer. In this type of agreement, the seller retains the right to find a buyer on their own while also allowing a listing agent to represent the property. If the seller finds a buyer independently, they can avoid paying the commission to the listing agency. However, if another company, acting as a cooperating broker, brings in a buyer, the listing agency is entitled to a commission because they are the ones who secured the exclusive agreement and facilitated the listing. Thus, they have the right to compensation for their efforts when a transaction leads to a sale, even if it is not made directly by them.

The other scenarios, such as the seller terminating the agreement for cause, or the seller procuring their own buyer, do not result in a commission being owed to the listing agent. Similarly, if the home is destroyed by fire, the listing agreement itself would typically become void, negating the listing agency's entitlement to commission.