Question

Seller Jordan signs a memorandum for an open listing with a broker authorizing the sale of her house for $65,000. The broker expends considerable time and money advertising and showing the house and obtains several offers. However, Jordan rejects the offers and instead sells the house to a friend. The broker:

a. is not entitled to a commission because of the open listing.
b. would be entitled to half the agreed commission.
c. could probably collect the full commission in a civil lawsuit.
d. should file for arbitration with the Real Estate Commissioner

Answer 1

Under an open listing agreement, a broker is typically only entitled to a commission if the broker is responsible for bringing in a buyer who purchases the property. If the seller, Jordan, sells the house to a friend independently of the broker's efforts, the broker is not generally entitled to a commission.

Step-by-step explanation:

Seller Jordan signed a memorandum for an open listing with a broker to sell her house for $65,000. If Jordan sells the house to a friend without the broker finalizing the sale, the broker's entitlement to a commission depends on the specific terms of the open listing agreement. Typically, in an open listing, the broker is only entitled to a commission if the broker actually brings a buyer who purchases the property. If Jordan rejects all offers obtained by the broker and independently sells the property to someone the broker did not bring in, then the broker is not entitled to a commission under the terms of an open listing. This situation reflects the nature of real estate transactions and the importance of understanding the terms of listing agreements.