What does the 'Effect a Sale' provision specify regarding the broker's compensation?

• A. The broker is paid only if the sale closes.
• B. The broker is paid a flat fee regardless of sale.
• C. The broker is entitled to compensation whether or not a sale closes.
• D. The broker earns commission only if the property appraises above listing price.

Answer: (C)

The main idea here is how a broker earns their fee when a sale is “effected.” An Effect a Sale clause makes clear that the broker is entitled to compensation for bringing about a sale through their efforts, even if the deal doesn’t actually close. In other words, once the broker has produced a saleable situation — a ready, willing, and able buyer under the agreed terms — the broker’s compensation is earned regardless of whether the final closing occurs. This protects the broker from not being paid just because a closing falls through after the sale has been set up.

So the correct understanding is that the broker receives the commission because the sale was effected by the broker’s actions, not solely because the closing happened. The other scenarios don’t fit this clause: paying only on closing, a flat fee no matter what, or earning only if the appraisal meets a price threshold aren’t aligned with the idea that compensation is earned when a sale is produced, independent of whether the closing completes.