When is a broker employed to find a purchaser entitled to compensation?

• A. At the signing of the contract.
• B. Upon consummation (the closing) of the contract.
• C. When the buyer makes an offer.
• D. When the listing expires.

Answer: (B)

The essential idea is that a broker earns their commission when the sale actually closes. The broker’s role is to bring a purchaser who is ready, willing, and able to buy under the contract, and payment is tied to the completion of the transaction—when title passes and funds are exchanged. If compensation were due at signing, or simply when an offer is made, there’d be no guarantee the deal would close, leaving the broker at risk. Therefore, the standard moment for payment is at closing, assuming the contract is consummated and the parties fulfill their obligations.