A salesperson has an exclusive buyer representation agreement (BRA) with a client which includes a clause stating that if the client purchases a property not listed on MLS, they are still obligated to pay commission to the brokerage. The client subsequently identifies a 'for sale by owner' property and, without notifying their salesperson, negotiates and completes an agreement of purchase and sale directly with the seller. What is the brokerage's legal Standing regarding commission in this scenario?

Question: A salesperson has an exclusive buyer representation agreement (BRA) with a client which includes a clause stating that if the client purchases a property not listed on MLS, they are still obligated to pay commission to the brokerage. The client subsequently identifies a 'for sale by owner' property and, without notifying their salesperson, negotiates and completes an agreement of purchase and sale directly with the seller. What is the brokerage's legal Standing regarding commission in this scenario?

Answer options:

• The brokerage is not entitled to commission as they provided no services for an off-market property and were not involved in the transaction. ✅ The brokerage is entitled to commission as per the exclusive buyer representation agreement, regardless of the property's listing status or the salesperson's direct involvement in the specific transaction.
• The brokerage is only entitled to commission if they can prove they had actively shown the client comparable 'for sale by owner' properties.
• The brokerage can seek compensation for marketing and advisory services provided up to the point of the client's direct purchase, but not full commission.

Correct answer: The brokerage is entitled to commission as per the exclusive buyer representation agreement, regardless of the property's listing status or the salesperson's direct involvement in the specific transaction.

Explanation: An exclusive buyer representation agreement creates an agency relationship where the buyer is obligated to pay commission to their brokerage, typically regardless of how they find the property, if a purchase is made during the agreement term that falls under its scope. This protects the brokerage's interests and ensures compensation for their overall representation services, as outlined in REBBA 2002.