Oregon Broker PSI Practice Exam

Under what circumstance cannot a broker collect a commission?

1. If the client verbally agrees to the listing

2. If there is a verbal fee agreement

3. If there is no written, signed listing or fee agreement

4. If the property is not sold within a year

The correct answer is: If there is no written, signed listing or fee agreement

A broker cannot collect a commission if there is no written, signed listing or fee agreement. This requirement is significant in real estate transactions because, under Oregon law, a listing agreement (and the accompanying fee agreement) must be in writing to be enforceable. This written documentation protects both the broker and the client by clearly outlining the terms of the engagement, including the commission structure, obligations, and rights of both parties. In situations where only verbal agreements exist, such as verbal consents for listings or discussions about fees, the broker may face challenges in proving entitlement to a commission if disputes arise. The absence of a formal, documented agreement means that there is no legally binding contract in place, which can leave the broker without recourse to collect commissions for services rendered. Written agreements also provide clarity and ensure compliance with local real estate licensing laws, which often mandate that certain types of agreements be documented to protect consumers and brokers alike. In contrast, other options involving verbal agreements do not adhere to these stringent requirements and thus do not provide the same level of legal protection or enforceability in a commission dispute.