Question

Broker Susan has listed the properties of two clients, the Smiths and the Jones. The Smith listing is an "exclusive right to sell" contract with a 120-day protection period, while the Jones is an "open" listing contract. Without having previously viewed each other's properties, Smith and Jones decide to buy each other's homes 30 days after their respective listings have expired. Under these circumstances, Broker Susan is entitled to collect:

a) Two commissions, one each from Smith and Jones.
b) One commission, only from client Smith.
c) One commission, only from client Jones.
d) No commission from either client.

Answer 1

Broker Susan is entitled to one commission from the Smiths due to the 'exclusive right to sell' contract's protection period, but no commission from the Jones because of the 'open' listing contract type.

Step-by-step explanation:

When determining whether Broker Susan is entitled to collect commissions from the Smiths and the Jones' transactions, one must understand the type of listing agreements in place. The Smith listing is an 'exclusive right to sell' contract, meaning that if the property is sold within the contract period, or during the specified protection period after the contract expires, the broker is entitled to a commission regardless of who sells the property. In this case, there is a 120-day protection period. The Jones listing, however, is an 'open' contract, which generally allows the seller to sell the property themselves without owing the broker a commission, or permits various brokers to work on selling the property without exclusive rights.

Since the Smiths and the Jones decided to buy each other's properties 30 days after their respective listings have expired, which is within the 120-day protection period of the Smith's contract, Broker Susan would be entitled to the commission from the Smiths but not from the Jones. No prior viewings or other connections to the sales were mentioned, indicating no actions of the broker led to these transactions directly for the Jones property, and there is no protection period.