Extender Clause

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DEFINITION of 'Extender Clause'

In real estate, a provision of an exclusive listing agreement that allows the exclusive agent to receive full commission after the exclusive listing agreement has expired if a potential buyer the agent brought to the house during the listing period came back later and decided to complete the purchase. An extender clause is also known as a protection clause or safety clause.


INVESTOPEDIA EXPLAINS 'Extender Clause'

The exclusive listing contract might be for a period of three months; the extender clause would apply for another three months (or whatever period was agreed on in the contract). The purpose of the clause is to reward the agent for doing his job and prevent the seller from abusing the agreement to avoid paying a commission.

RELATED TERMS
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