When is commission normally payable?

When is commission normally payable?

• A. Upon the broker bringing a ready, willing, and able buyer
• B. Upon closing
• C. Upon presentation of the offer
• D. Three days after closing

Answer: (B)

Commission is earned and becomes payable when the sale is completed and title transfers at closing. This is the moment the broker has performed the duties outlined in the agency agreement and the transaction is legally consummated, with funds available to pay the commission. Paying at closing aligns the payout with the actual completion of the deal, so the broker’s work is rewarded only after all terms are satisfied and the buyer’s financing and other conditions have been confirmed. Choosing payment upon presenting an offer or merely upon bringing a ready, willing, and able buyer would pay before a sale is finalized, which isn’t appropriate since no transfer of ownership or funds has occurred yet. Waiting even a few days after closing isn’t standard practice unless the contract specifies a separate timing.

Commission is earned and becomes payable when the sale is completed and title transfers at closing. This is the moment the broker has performed the duties outlined in the agency agreement and the transaction is legally consummated, with funds available to pay the commission.

Paying at closing aligns the payout with the actual completion of the deal, so the broker’s work is rewarded only after all terms are satisfied and the buyer’s financing and other conditions have been confirmed.

Choosing payment upon presenting an offer or merely upon bringing a ready, willing, and able buyer would pay before a sale is finalized, which isn’t appropriate since no transfer of ownership or funds has occurred yet. Waiting even a few days after closing isn’t standard practice unless the contract specifies a separate timing.