Difficulty: Easy

Average Score: 100%

A licensed affiliate broker acquires a listing for his firm but decides to switch firms before the listing contract expires. Which is TRUE?

Rationale

The listing remains the property of the original firm.

In real estate, a listing agreement is a contract between a seller and a brokerage firm. When an affiliate broker changes firms, the listing does not transfer with them; it remains with the original firm that holds the contract.

A (The affiliate broker can take the listing with him to his new firm, but the new firm must split any commission with the former firm.) YOUR ANSWER

This statement is incorrect because a listing agreement is a binding contract between the seller and the original firm, not the individual broker. The affiliate broker cannot take the listing to the new firm, as it remains the property of the original firm regardless of commission arrangements.

B (The affiliate broker can take the listing with him and it becomes the property of his new firm.) YOUR ANSWER

This choice is incorrect because a listing agreement is not transferable. The affiliate broker cannot take the listing to his new firm; it is the original firm's asset until the contract expires or is terminated as per its terms.

C (The listing remains the property of the original firm.) CORRECT

This statement is accurate. When an affiliate broker leaves a firm, any listings they secured remain with the original brokerage. The new firm cannot claim ownership of these listings, as they are legally bound to the original firm until the contract terms are fulfilled.

D (The listing is automatically cancelled.) YOUR ANSWER

This option is also incorrect. A change in the affiliate broker's employment does not automatically cancel the listing agreement. It remains valid and enforceable until its expiration or until the seller chooses to terminate it, thus retaining the original firm's rights.

Conclusion

In real estate practice, the integrity of listing agreements must be maintained to protect the interests of all parties involved. When an affiliate broker switches firms, the listing remains with the original firm, ensuring that the contractual obligations are honored. Understanding this principle is crucial for compliance with real estate regulations and for maintaining professional relationships within the industry.

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