Question 40

The seller would NOT be liable for the licensee's commission if the buyer lost his job and could not secure contingent financing.

In this scenario, the sale did not complete due to the buyer's inability to secure financing, which is beyond the seller's control. Thus, the seller is not liable for the commission since the buyer's situation directly affected the transaction.

A) The seller became ill and could not vacate the house.

This option is incorrect because the seller's illness is a direct reason that could prevent the completion of the sale. If the seller cannot fulfill their obligation to vacate the property, it leads to liability for the commission.

B) The seller's spouse refused to sign the sales contract.

This option is also incorrect as the refusal of the seller's spouse to sign the contract creates a legal barrier to the sale. Since the seller is unable to finalize the transaction due to this refusal, it would result in liability for the commission.

C) The buyer lost his job and could not secure contingent financing.

This is the correct answer because the buyer's loss of employment is an external factor that hinders their ability to proceed with the purchase. The seller is not responsible for situations that arise from the buyer's financial status.

D) The buyer refused to accept seller's restrictions that were not in the listing.

This choice is incorrect because the buyer's refusal to accept terms set by the seller, even if they were not explicitly listed, indicates a failure in mutual agreement. Thus, the seller could still be liable for the commission if the buyer walks away due to these restrictions.

Conclusion

The correct answer, C, highlights that the seller is not liable for the commission when the reason for the transaction failing is entirely due to the buyer's circumstances. Options A, B, and D involve factors that are within the seller's control or related to the seller's actions, which would result in commission liability.