Question 55

A broker earns a commission at that point.

In most listing contracts, a broker who finds a ready, willing, and able buyer who agrees to the terms of the listing agreement is entitled to earn a commission at that moment, regardless of whether the sale is finalized.

A) earns a commission at that point

This option is correct because, in real estate transactions, once a broker successfully procures a buyer who meets the listing agreement's criteria, they have fulfilled their primary duty and are entitled to a commission based on that achievement, even if the transaction has not yet closed.

B) does not earn a commission unless the sale closes

This option is incorrect because it implies that the broker's commission is contingent solely upon the closing of the sale. In reality, the broker earns a commission once a ready, willing, and able buyer is procured according to the terms set forth in the listing agreement.

C) earns a commission once contract contingencies are met

This option is also incorrect. While it is true that contingencies must be satisfied for the sale to progress, the broker's entitlement to a commission is established at the point a suitable buyer is found, not contingent on the fulfillment of contract conditions.

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

This option is misleading. Although a rescinded contract may prevent the sale from closing, the broker's right to a commission is based on their initial successful procurement of a buyer, thus they are entitled to a commission even if the contract is later rescinded.

Conclusion

The correct answer, A, is definitive because it aligns with established practices in real estate transactions where brokers earn their commissions upon finding qualified buyers. All other options fail to recognize this fundamental aspect of listing agreements, highlighting the importance of the broker's role in initiating the sales process.