The clause designed to ensure that a broker will receive a commission if negotiations with a ready, willing, and able buyer are completed after the listing has expired is called

Rationale

An extension or "tail" clause ensures that a broker will receive a commission if negotiations with a ready, willing, and able buyer are completed after the listing has expired.

This clause is specifically designed to protect the broker's right to a commission in scenarios where a potential sale is finalized after the original listing agreement has ended, thus providing a safety net for their efforts.

A (an acceleration clause) YOUR ANSWER

An acceleration clause typically refers to a provision in a loan agreement that allows the lender to demand full repayment of the loan if certain conditions are met, such as default by the borrower. This term is not related to real estate commissions or listing agreements, making it irrelevant in this context.

B (an alienation clause) YOUR ANSWER

An alienation clause is a provision in a mortgage or deed that allows the lender to require full repayment of the loan if the property is sold or transferred. While it deals with property transfer, it does not pertain to the broker's commission rights post-listing expiration, thereby rendering it an incorrect choice.

C (a coinsurance clause) YOUR ANSWER

A coinsurance clause is primarily associated with insurance policies, particularly in property insurance, requiring the policyholder to insure their property for a certain percentage of its value. This concept does not apply to real estate brokerage agreements or commissions, making it an unsuitable option for the question posed.

D (an extension or "tail" clause) CORRECT

An extension or "tail" clause specifically allows a broker to receive a commission if a sale occurs after the listing period, as long as the buyer was introduced during the listing. This clause is critical for safeguarding the broker's financial interests beyond the active listing timeframe.

Conclusion

In summary, an extension or "tail" clause is crucial in real estate transactions as it secures a broker's entitlement to commission after the expiration of a listing agreement, provided negotiations with a qualified buyer were initiated during the listing. The other options do not relate to broker commissions or listing agreements, emphasizing the unique nature and importance of the "tail" clause in protecting a broker's interests.

The clause designed to ensure that a broker will receive a commission if negotiations with a ready, willing, and able buyer are completed after the listing has expired is called

An extension or "tail" clause ensures that a broker will receive a commission if negotiations with a ready, willing, and able buyer are completed after the listing has expired.

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