Sarah lists her home with ABC Realty under an exclusive listing agreement that expires on June 30th. On July 15th, she sells the property to a buyer who first viewed the home during an open house hosted by ABC Realty in May. Assuming a standard holdover clause exists, what is the likely outcome?
Correct Answer
C) ABC Realty is entitled to full commission due to the holdover clause
The holdover clause protects ABC Realty's commission rights because they introduced the buyer to the property during the active listing period, even though the sale closed after expiry. This prevents sellers from avoiding commission by delaying sales until after listing expiration.
Why This Is the Correct Answer
Option C is correct because the holdover clause specifically protects ABC Realty's commission rights when a buyer they introduced during the active listing period purchases the property after expiry. Since the buyer first viewed the home at ABC Realty's open house in May (during the active listing), and purchased in July (within the typical holdover period), ABC Realty demonstrated the necessary causal connection between their marketing efforts and the eventual sale. Standard holdover clauses in Canadian listing agreements typically provide 30-90 days of protection post-expiry for such scenarios.
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