The Licensee Buyout Addendum is used by which parties?

• A. The designated listing broker
• B. The employing broker of listing company
• C. Both the designated listing broker and the employing broker of listing company
• D. The buyer/broker

Answer: (C)

The situation being tested is how a licensee who is affiliated with a brokerage is formally separated from that affiliation in the context of a listing. The Licensee Buyout Addendum is used by the parties who control the listing relationship—the designated listing broker and the employing broker of the listing company—because it sets out the terms, payments, and release related to the licensee’s buyout. This document ensures both sides agree on how compensation from the listing will be handled and how the licensee will disengage, protecting everyone involved and preventing disputes later on.

In practice, the addendum addresses how an internal buyout is financed and administered within the listing framework, detailing terms that affect the listing and the brokerage’s ongoing interests. It isn’t about the buyer’s broker alone; the key signatories are the listing-side brokers who must approve and document the arrangement.