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 after the listing has expired if negotiations with a ready, willing, and able buyer are completed.

This clause provides protection for brokers, allowing them to collect commissions on sales that occur after the termination of a listing agreement, provided the buyer was procured during the listing period.

A (An acceleration clause) YOUR ANSWER

An acceleration clause is typically found in loan agreements and allows a lender to demand full repayment of a loan if certain conditions are met, such as default. It does not pertain to real estate commissions or the continuation of a broker's rights post-listing expiration.

B (An alienation clause) YOUR ANSWER

An alienation clause is included in mortgage contracts and allows the lender to demand full repayment if the property is sold or transferred without their approval. This clause relates to the transfer of property ownership, not to the commission structure for brokers following the expiration of a listing.

C (A coinsurance clause) YOUR ANSWER

A coinsurance clause is often found in insurance policies and requires the policyholder to carry insurance equal to a specified percentage of the property's value to receive full claims. This concept is unrelated to real estate commissions or broker agreements, making it irrelevant to the question at hand.

D (An extension or 'tail' clause) CORRECT

This clause specifically addresses the situation where a broker remains entitled to a commission if a sale occurs with a buyer they introduced, even after the listing agreement has expired. This ensures that brokers are compensated for their efforts in securing potential buyers, maintaining their financial interests post-listing.

Conclusion

An extension or 'tail' clause is critical in real estate transactions as it protects the broker's right to a commission beyond the life of a listing agreement, provided they have engaged a buyer who is ready, willing, and able to complete the deal. Other clauses mentioned do not pertain to the real estate commission structure and serve different purposes within financial and legal contexts.

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 after the listing has expired if negotiations with a ready, willing, and able buyer are completed.

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