What does a carryover clause in a listing agreement ensure?

A carryover clause in a listing agreement specifically ensures that the broker earns a commission if the property sells shortly after the listing period has expired, provided the potential buyer was introduced to the property during the listing term. This clause is designed to protect the broker's interests by allowing them to receive compensation for their efforts in marketing the property and bringing potential buyers to it, even if the actual sale occurs after the agreement has concluded.

This arrangement encourages brokers to actively promote the property, knowing that they have a defined time frame during which they can expect to be compensated, regardless of when the eventual sale might take place, as long as the right conditions are met. In this way, a carryover clause creates an incentive for brokers while providing some measure of continued protection for sellers against the possibility of their property selling to a buyer they had introduced to the market during the listing period.