What is the term for the clause that guarantees a broker will receive a commission if negotiations with a buyer occur after the listing has expired?

The term that refers to the clause guaranteeing a broker will receive a commission if negotiations with a buyer occur after the listing has expired is known as an extension or tail clause. This clause extends the broker's right to earn a commission beyond the initial listing period, ensuring that if the broker has established a relationship with a potential buyer during the listing term, they are protected if that buyer enters into a transaction after the listing agreement has ended.

Extension or tail clauses are important for brokers as they provide financial security and recognition for their efforts in marketing and showing the property, even after their formal agreement with the seller has lapsed. This clause is often included in listing contracts to motivate brokers to put forth their best efforts without the risk of losing the possibility of a commission simply due to the timing of a sale.

Other options like an alienation clause typically relate to the transfer of property and an acceleration clause often involves mortgage agreements where the remaining balance becomes due under certain conditions. A holdover clause, while it also deals with the continuation of certain rights, usually pertains to a tenant's rights in a lease situation rather than specifically regarding commission rights for brokers post-listing. Thus, the extension or tail clause precisely addresses the broker's commission in the context described in