California Real Estate Broker Practice Exam

Question: 1 / 1000

What is the purpose of a safety clause in a listing agreement?

Guarantees that the property will be sold within a specified time

Ensures the broker will be paid under certain circumstances even if the listing agreement expires

The purpose of a safety clause in a listing agreement is to ensure that the broker will be compensated under specific conditions even after the listing agreement has expired. This clause is particularly beneficial for brokers as it provides a measure of protection for their efforts in marketing the property. If a buyer who was introduced to the property by the broker purchases it after the agreement has concluded, the safety clause allows the broker to claim a commission.

This provision acknowledges that the time and resources the broker invested in marketing the property can lead to a sale even after the official relationship has ended. Therefore, the safety clause serves to safeguard the broker's commission rights for a period following the termination of the agreement if a transaction occurs with a previously interested party.

Get further explanation with Examzify DeepDiveBeta

Allows the seller to terminate the agreement without penalties

Protects the seller from buyer defaults

Next Question

Report this question

Download California Real Estate Broker Practice Exam PDF Study Guide
Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy