A licensee obtains a listing for a property owned by Jones and then introduces a prospect, Bailey, to Jones. Jones and Bailey negotiate, but Jones sells to another buyer, Smitts. Six months later, Smitts sells the property to Bailey. Is the licensee entitled to a commission from Smitts
No, because the licensee's listing agreement was with Jones.
The licensee's entitlement to a commission is directly linked to the contractual agreement with Jones, the property owner. Since the licensee introduced Bailey to Jones but did not finalize a sale with him, the agreement does not extend to subsequent transactions between Bailey and Smitts.
While the licensee did initially introduce Bailey to the property, this alone does not entitle them to a commission. The commission is typically earned when a sale occurs as a direct result of the licensee’s efforts, which in this case did not materialize as Jones sold to another buyer instead.
Good faith negotiations do not guarantee commission entitlement. The licensee must have a binding agreement with the seller that accounts for any sales, and since Jones sold to Smitts instead of closing the deal with Bailey, the licensee's role in good faith negotiations is irrelevant to earning a commission.
The timing of Smitts’ resale to Bailey does not impact the licensee's commission rights. The critical factor is whether the licensee had a valid agreement with Jones at the time the property was sold, not the duration between sales.
The licensee is not entitled to a commission from Smitts because their listing agreement was solely with Jones, and there was no successful transaction that linked Bailey’s eventual purchase to the licensee’s efforts. This situation underscores the importance of understanding contractual relationships in real estate transactions, highlighting that commissions are awarded based on completed sales that arise from established agreements.
Related Questions
View allThe seller has a beautiful dining room ceiling fixture that matches th...
To identify possible encroachments, a buyer should insist upon
Settlement documents include a bill of sale when the sale
A buyer makes an offer on a listed property contingent upon the spouse...
A broker is working with a family which is multiracial. The broker onl...
Related Quizzes
View allAlabama Property and Casualty License Practice Exam
California Real Estate Practice Final Exam Answers
PSI National Real Estate License Exam Prep
Colorado State Real Estate License Exam
Illinois Real Estate Exam Prep Online
Free Illinois Real Estate Exam Practice Test
Illinois Real Estate Broker Exam Prep
Illinois Real Estate Exam Study Guide PDF
Illinois National Real Estate Exam
Illinois Real Estate State Exam Questions
- ✓ 500+ Practice Questions
- ✓ Detailed Explanations
- ✓ Progress Analytics
- ✓ Exam Simulations