Final answer:
In the absence of a specified commission amount in the listing agreement between Broker A and Seller B, the commission may be negotiated based on the customary rate in the neighborhood, which is 5%. However, without a clear agreement, the legal obligation is uncertain.
Step-by-step explanation:
Commission on Real Estate Sale with Undefined Terms
When a listing agreement between a broker and a seller does not specify the commission amount, there may be room for dispute upon the sale of the property. However, if there is a customary commission rate in the area, such as the 5% commonly paid by owners in the neighborhood mentioned, this may become a reference point for determining the commission owed. Since the listing agreement with Broker A and Seller B lacks a specific commission amount, in practice, the commission owed—if any—would likely be the subject of negotiation or mediation. In some cases, a court might look at the customary rate as a reasonable standard to imply the terms not specified in the agreement. Nonetheless, without a definite agreement, it is unclear whether Seller B would be legally obligated to pay Broker A the customary rate or any commission at all.
The situation described emphasizes the importance of clear and explicit contracts in real estate transactions to avoid ambiguity and ensure that all parties understand their financial obligations.