Difficulty: Hard

Average Score: 45%

A listing licensee is entitled to a commission when

Rationale

A listing licensee is entitled to a commission when the terms of the listing agreement have been met.

The commission for a listing licensee is earned when all conditions outlined in the listing agreement are fulfilled, which typically includes successfully facilitating a sale or lease and ensuring that the seller has complied with any obligations related to the transaction.

A (the title is delivered) YOUR ANSWER

Although the delivery of the title signifies the completion of the property transfer, it does not necessarily mean that the listing licensee has met the terms of their agreement. The commission is typically recognized once all agreed-upon actions, including the sale conditions, are satisfied, not merely upon title transfer.

B (an offer to purchase has been received by the seller) YOUR ANSWER

Receiving an offer to purchase does not automatically entitle the listing licensee to a commission. The offer may not lead to a successful closing or may be rejected by the seller, which means the terms of the listing agreement may still remain unfulfilled.

C (the property is shown to the eventual buyer) YOUR ANSWER

Showing the property to a potential buyer is just one step in the sales process and does not guarantee a commission. The listing licensee must ensure that the transaction is completed according to the stipulations of the listing agreement, which goes beyond merely showing the property.

D (the terms of the listing agreement have been met) CORRECT

This is the correct answer because the commission is typically earned once all specified conditions in the listing agreement are fulfilled, which generally includes the successful sale or lease of the property as outlined in the contract.

Conclusion

A listing licensee’s entitlement to commission hinges on the fulfillment of the terms set out in the listing agreement. While related actions like showing the property and receiving offers are important, they do not suffice for commission eligibility unless the contractual obligations are fully met. Understanding this principle is vital for both licensees and sellers to ensure clarity in real estate transactions.

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