Question 127

A broker earns a commission at that point.

When a broker procures a ready, willing, and able buyer who agrees to purchase the property under the terms of the listing agreement, the broker earns a commission at that point, fulfilling their contractual obligation.

A) earns a commission at that point.

This option is correct because it aligns with standard practices in real estate transactions. Once a broker successfully finds a buyer who is ready, willing, and able to purchase the property as specified in the listing agreement, they have met the necessary criteria to earn their commission.

B) does not earn a commission unless the sale closes.

This option is incorrect. While it is true that many brokers do not receive payment until the sale closes, the critical moment for earning a commission occurs when they find a buyer who is ready, willing, and able, as per the terms of the listing agreement.

C) earns a commission once contract contingencies are met.

This option is also incorrect. Earning a commission is contingent upon securing a buyer who meets the qualifications set out in the listing agreement, not necessarily dependent on the completion of contract contingencies, which occur later in the transaction process.

D) does not earn a commission if the buyer and seller agree to rescind the contract.

This option is misleading. While it is true that if a contract is rescinded, the broker may not earn a commission, this does not negate the fact that the broker earns their commission when they find a qualified buyer, which is the primary focus of this question.

Conclusion

The rationale for option A being the correct answer lies in the standard practices of real estate brokerage. A broker’s entitlement to a commission arises when they successfully identify a buyer who meets the criteria specified in the listing agreement, irrespective of subsequent developments in the transaction. Other options fail to capture this fundamental principle of real estate commissions.