Unlike an exclusive listing, an owner who sells personally owes no one
A worked RES examination question on listings and agency agreements, from our Paper 2 bank — with the rule it turns on, and why each of the four options is right or wrong.
The question
A seller who wants the widest possible exposure asks his agent to run through the features of an open (non-exclusive) listing before he commits. He has heard conflicting accounts of whether he would owe commission on a sale he closes himself, how many agents he may put on the job, and when such a listing comes to an end, and he wants each point settled before he signs.
Consider the following statements.
- (i) The owner who finds a buyer personally must still pay the appointed agents commission.
- (ii) A non-exclusive agreement has no fixed expiry date and auto-terminates on sale or withdrawal.
- (iii) Any number of agents may market the property under an open listing.
- (iv) Only the agent who actually closes the transaction is paid commission.
The answer, and why
Answer: A
The rule. An open listing has no fixed expiry (it auto-terminates on sale or withdrawal), allows any number of agents, and pays only the agent who closes. Unlike an exclusive listing, an owner who sells personally owes no one.
Why A is correct. (ii) no fixed expiry, (iii) any number of agents and (iv) only the closer paid are correct. (i) is false — an open-listing owner who finds his own buyer owes nothing.
The other options.
- D adds the false (i), the owner owing on a personal sale.
- B drops (iii), the any-number-of-agents point.
- C drops (ii), the no-fixed-expiry point.
Exam note. Open-listing owner selling personally owes nothing — the opposite of the exclusive case.
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