When is a real estate agent considered to have earned a commission?

• A. He produces a buyer willing, able and ready to buy the property.
• B. The sale closes with the seller's approval.
• C. The listing agreement expires without sale.
• D. The broker signs an exclusive-right-to-sell agreement.

Answer: (A)

The key idea here is procuring a ready, willing and able buyer. A real estate agent earns their commission when they have performed the essential service of bringing to the table a buyer who can and will purchase the property on terms acceptable to the seller. In other words, once a buyer who is financially qualified and prepared to buy is produced and the parties are moving toward a contract, the broker has earned their commission—not merely by listing the property, waiting for the seller’s approval, or having a listing expire without a sale. The actual closing or the seller’s final approval are downstream events that come after the broker has successfully produced a ready, willing and able buyer and the deal progresses toward a contract; the exclusive-right-to-sell arrangement matters for the broker’s right to compensation during the listing period, but the trigger for earning is the ready, willing and able buyer the broker has brought to the table.