Difficulty: Medium

Average Score: 50%

An owner lists with Broker A but then sells to a buyer found by Builder B. Which statement is true?

Rationale

Broker A is entitled to a commission.

Broker A has a contractual agreement with the owner to list the property, which typically entitles them to a commission regardless of who ultimately sells the property. The contract usually stipulates that if the property is sold during the listing period, the broker earns a commission even if the buyer is introduced by another party.

A (Broker A is entitled to a commission.) CORRECT

Broker A has a legal right to the commission because they were the listing broker and facilitated the sale process. Even though the buyer was found by Builder B, the original contract with the seller grants Broker A entitlement to a commission as the broker who listed the property.

B (Builder B is entitled to full commission.) YOUR ANSWER

Builder B is not entitled to full commission unless there is a prior agreement or contract with the seller regarding compensation. Since the property was listed with Broker A, Builder B’s role does not automatically qualify them for a commission unless specified by a separate arrangement.

C (Broker A must share commission with Builder B.) YOUR ANSWER

Broker A is not required to share the commission with Builder B unless an agreement exists between them that states otherwise. The commission is typically owed to the listing broker based on the terms of the listing agreement with the property owner.

D (The seller may pay the commission to Builder B.) YOUR ANSWER

While the seller may choose to pay Builder B a commission, this would be outside the customary arrangement since Broker A is the broker who listed the property and is entitled to the commission as per their contract. The seller’s payment to Builder B would need a specific agreement in place.

Conclusion

Broker A is entitled to a commission due to their listing agreement with the seller, which legally binds them to earn a commission regardless of who finds the buyer. Other options suggest alternative commission structures that do not align with typical real estate practices, reinforcing that Broker A's contractual rights prevail in this scenario.

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