California Real Estate Practice Exam

An owner gives an "open listing" to many brokers, including "A" and "B." Broker A shows the home to a customer, but does not make a sale. Broker B later sells the home to the same customer. The seller is obligated to pay:

1. "A" a full commission

2. "A" and "B", who both receive full commissions

3. "A" and "B", who split the commission

4. "B" a full commission

The correct answer is: "A" a full commission

In an open listing scenario, a property owner has the flexibility to work with multiple brokers without being tied to any one of them. This means that if one broker brings in a buyer and the sale occurs, that broker is entitled to a commission, while other brokers who showed the property but did not lead to a sale are not entitled to any compensation. In this case, Broker A showed the home to a customer but did not complete the sale, and Broker B ultimately sold the home to the same customer. The key factor here is that Broker A did not have a successful transaction that resulted in a sale. Therefore, Broker A does not earn a commission since the arrangement was based on the understanding that only the broker who successfully sells the property is entitled to a commission. Since Broker B completed the sale, Broker B is the only one entitled to a full commission. In an open listing, the seller only pays the broker who successfully closes the sale, which in this instance is Broker B.