Which statement correctly distinguishes a unilateral listing contract from a bilateral listing contract?

Which statement correctly distinguishes a unilateral listing contract from a bilateral listing contract?

• A. A unilateral listing compensates the broker only if a sale occurs; a bilateral listing obligates both parties to perform.
• B. A unilateral listing guarantees sale; a bilateral listing does not.
• C. A bilateral listing does not require a written contract; unilateral does.
• D. A unilateral listing cannot be terminated early; bilateral can.

Answer: (A)

Understanding how compensation and obligations differ helps you see the distinction. In a unilateral listing, the owner promises to pay the broker a commission only if the broker actually brings about a sale that closes. The broker’s promise isn’t to perform as a mutual obligation from the start; instead, the payment is triggered by performance—a sale occurs. In a bilateral listing, both parties make promises: the seller agrees to pay a commission, and the broker agrees to perform the duties of marketing, presenting offers, and representing the seller. That creates mutual obligations from the outset. So the statement that matches this distinction is that a unilateral listing compensates the broker only if a sale occurs, while a bilateral listing obligates both parties to perform. The other choices misstate how unilateral listings work (they don’t guarantee a sale), ignore real-world written-contract norms in real estate, or wrongly claim termination terms that aren’t universally true.

Understanding how compensation and obligations differ helps you see the distinction. In a unilateral listing, the owner promises to pay the broker a commission only if the broker actually brings about a sale that closes. The broker’s promise isn’t to perform as a mutual obligation from the start; instead, the payment is triggered by performance—a sale occurs. In a bilateral listing, both parties make promises: the seller agrees to pay a commission, and the broker agrees to perform the duties of marketing, presenting offers, and representing the seller. That creates mutual obligations from the outset.

So the statement that matches this distinction is that a unilateral listing compensates the broker only if a sale occurs, while a bilateral listing obligates both parties to perform. The other choices misstate how unilateral listings work (they don’t guarantee a sale), ignore real-world written-contract norms in real estate, or wrongly claim termination terms that aren’t universally true.