Humber/Ontario Real Estate Course 3 Exam Practice

In the scenario where a buyer wants to wait until a listing expires to make an offer, what is true about the holdover period for the seller?

1. The seller can sell the property during the holdover period without paying any commission since the buyer was never directly shown the property.

2. The buyer must purchase the property through the listing brokerage since they were introduced to it during the listing period.

3. The seller is obligated to notify the brokerage about the buyer's interest.

4. The seller is free to wait until after the listing expires without informing the brokerage.

5. Holdover terms are not enforceable in real estate transactions.

6. Holdover period applies only if the buyer was shown the property by the seller or another broker.

The correct answer is: The buyer must purchase the property through the listing brokerage since they were introduced to it during the listing period.

The correct answer is that the buyer must purchase the property through the listing brokerage since they were introduced to it during the listing period. This reflects the principles of agency and compensation in real estate transactions. When a property is listed, the brokerage invests time and resources into marketing the property and finding a buyer. If a buyer becomes interested in a property during the active listing period, even if they wait for the listing to expire to make an official offer, they are still generally obligated to work with the listing brokerage if they show intent to purchase. This ensures that the brokerage is compensated for their role in facilitating the relationship between the buyer and seller, even if the transaction closes after the listing has expired. Many listing agreements include clauses to protect the brokerage during such holdover periods, reinforcing the notion that buyers cannot simply bypass the brokerage after being introduced to a property through their efforts.