Sam is the listing agent for a single-family home. He knows that he will earn compensation if he procures the buyer for the home, but he will not earn compensation if another broker OR the owner procures the buyer. What type of listing agreement does Sam have?

Rationale

Sam has an exclusive agency listing agreement.

In an exclusive agency listing, the listing agent earns a commission only if they personally procure a buyer for the property. If the owner or another broker finds a buyer, the listing agent does not receive compensation, which aligns with the scenario presented.

A (exclusive agency listing) CORRECT

This type of listing agreement allows the owner to sell the property independently without owing a commission to the agent if they find the buyer themselves. However, if the agent successfully procures a buyer, they will earn their commission. This matches Sam's situation perfectly.

B (net listing) YOUR ANSWER

A net listing guarantees the seller a minimum amount for the sale, and any amount over that is retained by the listing agent as commission. This type of agreement does not restrict the seller from finding their own buyer and does not align with Sam's inability to earn compensation if another broker or the owner procures the buyer.

C (open listing) YOUR ANSWER

In an open listing agreement, the seller can list the property with multiple agents and only pays the commission to the agent who finds the buyer. Since Sam is not guaranteed commission if another broker or the owner procures the buyer, this does not accurately describe his situation.

D (exclusive authorization and right-to-sell listing) YOUR ANSWER

This agreement grants the listing agent the exclusive right to sell the property, meaning they will earn a commission regardless of who finds the buyer. This contradicts the condition that Sam will not earn a commission if another broker or the owner brings in the buyer.

Conclusion

An exclusive agency listing is characterized by the listing agent earning a commission only if they are the one to procure a buyer. In Sam's case, this agreement correctly reflects his potential to earn compensation solely through his own efforts, while also allowing the owner or another broker to independently find a buyer without incurring a commission to Sam.

Sam is the listing agent for a single-family home. He knows that he will earn compensation if he procures the buyer for the home, but he will not earn compensation if another broker OR the owner procures the buyer. What type of listing agreement does Sam have?

Sam has an exclusive agency listing agreement.

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