61. A licensee obtains a listing for a property owned by Jones and then introduces a prospect, Bailey, to Jones. Jones and Bailey negotiate, but Jones sells to another buyer, Smitts. Six months later, Smitts sells the property to Bailey. Is the licensee entitled to a commission from Smitts
Answer: D
No, because the licensee's listing agreement was with Jones.
The licensee is not entitled to a commission from Smitts because their contractual relationship was exclusively with Jones, the original property owner. The commission is typically owed to the licensee for the sale facilitated between the seller and a buyer during the term of the listing agreement.
A) Yes, because the licensee originally interested Bailey in the property.
This option is incorrect because merely introducing Bailey to the property does not establish a right to a commission. The licensee's entitlement to a commission is based on the contractual agreement with the seller, which in this case was only with Jones.
B) Yes, because negotiations between Jones and Bailey were made in good faith.
While negotiations may have been conducted in good faith, this does not entitle the licensee to a commission. The key factor is the existing listing agreement, which dictates the terms of compensation and does not include a commission for future sales after the property was sold to another buyer.
C) No, because Jones' property was resold after 3 months.
This option is misleading; the timing of the resale does not affect the licensee's entitlement to a commission. The primary reason for the licensee not receiving a commission is the lack of a direct contractual relationship with Smitts, rather than the elapsed time since the original sale.
D) No, because the licensee's listing agreement was with Jones.
This statement is accurate. The licensee's commission is contingent upon the sale of the property while the listing agreement is in effect and with the party to whom the agreement was made. Since Smitts was not a party to the listing agreement, the licensee is not entitled to a commission for the subsequent sale to Bailey.
Conclusion
The correct answer is D, as the licensee's entitlement to a commission is dependent solely on their contractual relationship with Jones. All other options fail to acknowledge the fundamental principle that commissions are earned based on existing agreements, and the licensee’s role does not extend to future transactions involving parties outside of that agreement.