Extender Clause

AAA

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
  1. Real Estate

    Land plus anything on it, including buildings and natural resources.
  2. Exclusive Listing

    A real estate sale transaction in which a specified real estate ...
  3. Commission Broker

    Someone who gets paid by the brokerage company for which he works ...
  4. Real Estate Agent

    A person with a state/provincial license to represent a buyer ...
  5. Commission

    A service charge assessed by a broker or investment advisor in ...
  6. Open Listing

    A property listing that uses multiple real estate agents in order ...
Related Articles
  1. Budgeting

    Will You Break Even On Your Home?

    Calculate how much your property will need to appreciate to cover the costs of owning it.
  2. Taxes

    Will Your Home Sale Leave You With Tax Shock?

    Learn how the newest tax laws apply to the proceeds you earn.
  3. Home & Auto

    How To Stage Your Home For A Quick Sale

    Learn how to make your house appealing to the largest number of buyers and increase your chances at a fast sale.
  4. Home & Auto

    Finding A Good Real Estate Agent

    Don't go it alone in the real estate market. We'll show you how to find the help you need.
  5. Economics

    What is Earnest Money?

    An earnest money deposit shows the seller that a buyer is serious about purchasing a property.
  6. Personal Finance

    Why These Could Be 2015's 10 Best REITs

    If you want to get on the REIT money train, then you better hurry up. However, the REITs covered here have potential beyond 2015.
  7. Investing

    Eyeing REITs? Consider these Risks

    REITs are a great way to invest in real estate without all the drama and headaches. That said, there are risks.
  8. Brokers

    How Real Estate Agent and Broker Fees Work

    Buying or selling a home? What you need to know about real estate agent and broker fees.
  9. Options & Futures

    Give Yourself More Options With Real Estate Options

    Real estate options have many benefits, including a smaller initial capital requirement.
  10. Options & Futures

    How To Make Money WIth Real Estate Options

    Buying real estate options is one way to invest in real estate at a lower entry cost.

You May Also Like

Hot Definitions
  1. Asset Class

    A group of securities that exhibit similar characteristics, behave similarly in the marketplace, and are subject to the same ...
  2. Fiat Money

    Currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat ...
  3. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  4. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  5. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  6. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
Trading Center