New Jersey Real Estate Exam Practice Question
The clause designed to ensure that a broker will receive a commission if negotiations with a ready, willing, and able buyer are completed after the listing has expired is called
Correct Answer: D
Rationale: An extension or 'tail' clause allows a broker to receive a commission if a sale occurs after the listing expires, provided negotiations began while the listing was active. This ensures that brokers are compensated for their efforts in finding buyers.
Option A, the acceleration clause, pertains to loan agreements, allowing lenders to demand full repayment upon default, which is unrelated to real estate commissions.
Option B, the alienation clause, restricts property transfer and does not address broker commissions.
Option C, the coinsurance clause, relates to insurance policies and is not relevant to real estate transactions.
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