Broker Mike in Nebraska is representing buyer Lena in the purchase of a farmstead. Lena's written buyer representation agreement with Mike's firm expires on March 15. On March 20, Lena independently contacts the seller and negotiates a purchase directly, signing a contract on March 22. The property was first shown to Lena by Mike on February 10, while the agreement was still active. Under Nebraska agency law, which of the following is most accurate regarding Mike's right to compensation?
Correct Answer
D) Mike may be entitled to compensation if the buyer representation agreement contained a holdover or protection clause covering properties shown during the agreement period
In Nebraska, as in most states, buyer representation agreements commonly include a holdover or protection clause (also called an extender clause) that entitles the broker to compensation if the buyer purchases a property that was shown or introduced to the buyer during the agreement period, within a specified time after the agreement expires. Because Mike showed Lena the farmstead on February 10 while the agreement was active, and Lena contracted to purchase it on March 22 — only 7 days after expiration — Mike may be entitled to compensation if the agreement contained such a clause. The enforceability and terms of the holdover clause govern Mike's rights.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The legal requirement for real estate agents to inform all parties about who they represent in a transaction, typically provided at first substantive contact.
A legal relationship in which one person (the agent) is authorized to act on behalf of another person (the principal) in business transactions with third parties.
The legal ending of an agency relationship, which can occur through completion, expiration, mutual agreement, breach, death, incapacity, or bankruptcy of either party.
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