A broker whose listing has expired has given the seller the names of buyers who were shown the property prior to the termination of the listing. What listing contract clause requires this action if the brokerage is to earn a commission on a later sale to one of the named buyers?
Protection clause
The protection clause in a listing agreement serves to ensure that the brokerage can earn a commission on any sale to buyers who were shown the property during the term of the listing, even if the listing has expired. This clause protects the broker’s interests by recognizing their role in introducing potential buyers to the property.
This clause explicitly states that if the broker has introduced buyers to the property during the listing period, they are entitled to a commission if those buyers purchase the property after the listing expires. It is designed to safeguard the broker’s efforts and investment in marketing the property.
The due diligence clause refers to the responsibilities of the buyer or seller to conduct thorough research and investigation regarding the property. While important, it does not pertain to the broker's entitlement to commission or the obligation to inform sellers about prospective buyers after a listing has ended.
The procuring cause clause relates to the broker's role in being the primary agent responsible for bringing about a sale. While it is relevant in determining commission entitlement, it does not specifically require the broker to provide a list of buyers after the listing has expired, which is the focus of the protection clause.
The MLS permission clause pertains to the permissions and requirements for listing a property on the Multiple Listing Service. It does not address the broker's rights regarding commission on sales to buyers who were shown the property prior to the expiration of the listing.
The protection clause is essential in real estate transactions as it ensures that brokers can receive commissions for sales to buyers introduced during the listing period, even if the listing has expired. This clause protects the broker's efforts in marketing the property and establishes clear rights regarding commission after a listing's termination. Understanding such contractual obligations helps maintain fairness and accountability in real estate transactions.
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