A California seller attempts to cancel an exclusive listing agreement two months into a six-month term. The broker has not yet procured a buyer. Which statement most accurately describes the seller's legal position?
Correct Answer
C) Because a listing agreement is a bilateral contract, the seller does not have an automatic legal right to cancel, but the broker may agree to release the seller; if the broker refuses and later procures a ready, willing, and able buyer, compensation may still be owed
A listing agreement is a bilateral contract, and California law does not grant sellers an automatic statutory right to unilaterally cancel a valid listing before its expiration. While courts will not order specific performance compelling a seller to sell (Civil Code §3390), the broker retains the right to sue for damages or earned commission. In practice, brokers often agree to release sellers, but absent that agreement, the seller who cancels may remain liable for compensation — particularly if the listing contains a protection (safety) clause or if the broker subsequently procures a ready, willing, and able buyer within the protected period.
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Related Topics & Key Terms
Key Terms:
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More Practice Of Real Estate Disclosures Questions
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- → A California salesperson's personal real estate blog states, 'I closed 50 transactions last year!' The actual number was 32. A competing agent reports this to the DRE. What is the most likely regulatory outcome?
- → A seller is selling a condominium in a California common interest development (CID). In addition to the TDS, which disclosure package is the seller required to provide under California Civil Code §4525?
- → A seller completing the Transfer Disclosure Statement in California must disclose various property conditions. All of the following must be disclosed on the TDS EXCEPT:
- → Under California Civil Code §1102, what is the primary purpose of the Transfer Disclosure Statement (TDS) in a residential sale?
- → A California listing agent receives a third-party NHD report confirming the property is in a Seismic Hazard Zone. The report also includes a supplemental notation indicating the property lies within a tsunami inundation zone per California Geological Survey mapping. The seller asks the agent whether the tsunami risk must be disclosed to the buyer. Which of the following is the most accurate statement of the agent's disclosure obligation under current California law (effective January 1, 2025)?
- → A property in a California Mello-Roos district has a base Proposition 13 property tax of 1% on its assessed value of $600,000, plus a Mello-Roos special tax of $3,200 per year. What is the total annual property tax bill for this property?
- → A California buyer's agent conducts a visual inspection of a property and observes extensive, recently applied caulking around all window frames and along the base of the exterior walls. What is the buyer's agent's most appropriate next step?
- → A California buyer's agent conducts a visual inspection and notices that the property's water heater is not strapped to the wall as required by California law for seismic safety. Under California Health and Safety Code §19211, water heaters must be braced. What should the buyer's agent do?
- → Tenant died in apartment unit two years ago. Landlord discloses death to prospective tenant, mentioning AIDS-related cause. Which statement is correct?
- → A homeowner in a California Mello-Roos district wants to pay off the remaining Mello-Roos bond obligation on their property. The outstanding principal balance of the bonds allocated to the property is $35,000, and the CFD charges a 3% prepayment premium. What is the total payoff amount?
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