Humber/Ontario Real Estate Course 3 Exam Practice

What does a holdover provision typically do?

1. Applies regardless of whether the buyer is introduced to the listed property before or after the listing expires.

2. Is most commonly found in agreements of purchase and sale.

3. Typically ranges between 60 and 90 days, but can be longer.

4. Extends the termination date of the listing agreement.

5. It applies only if the sale price of the property exceeds a particular amount.

6. It is mandatory in all selling agreements.

The correct answer is: Typically ranges between 60 and 90 days, but can be longer.

A holdover provision is a critical element of real estate agreements, particularly in listing agreements, that is designed to protect the interests of a real estate agent or seller after the expiration of the listing period. This provision typically states that if a buyer who was introduced to the property during the listing period subsequently purchases the property within a specified period after the listing has expired, the agent is still entitled to a commission. The timeframe for a holdover provision generally falls between 60 and 90 days, although it can indeed be longer based on the terms agreed upon in the contract. This period allows the agent to secure compensation for their efforts in marketing the property and introducing the buyer, even after the official relationship has ended. The flexibility in the length of the holdover provision allows parties to negotiate terms that reflect the circumstances of the sale and the efforts made by the agent or seller. Understanding the holdover provision is essential for both buyers and sellers in the real estate transaction process, as it clarifies the obligations and rights of the parties involved, ensuring that the agents' efforts are rewarded appropriately even if the sale occurs after the contract has technically ended.