PSI Virginia Real Estate Practice Exam

What is a defining feature of an exclusive right-to-represent contract?

1. The buyer may hire multiple brokers

2. Commission is owed even if the buyer finds the property independently

3. The contract can be revoked at any time by either party

4. There is no commission paid to the broker

The correct answer is: Commission is owed even if the buyer finds the property independently

An exclusive right-to-represent contract is characterized by the understanding that the broker will earn a commission regardless of whether the buyer ultimately finds the property on their own. This type of agreement gives the broker a strong incentive to dedicate their efforts towards finding a suitable property for the buyer, as they are guaranteed compensation for their services upon the successful completion of a transaction, irrespective of who locates the property. This ensures that the broker is motivated to provide full representation and support throughout the buying process, knowing their commission is secured. The other options present features that do not align with the nature of an exclusive right-to-represent agreement. In this type of contract, the buyer typically does not have the flexibility to hire multiple brokers, and revocation of the contract by either party at any time would undermine the exclusive nature of the arrangement. Furthermore, the statement about no commission being paid to the broker contradicts the essence of the contract, as it precisely establishes the broker's entitlement to a commission for their representation in a real estate transaction.