Under a listing contract, when is the owner obligated to pay a commission?

• A. The contract guarantees sale at listing price.
• B. The contract only applies to residential properties.
• C. The contract obligates the owner to pay a commission if the broker obtains a ready, willing, and able buyer.
• D. The contract is not enforceable.

Answer: (C)

The owner pays the commission when the broker has produced a ready, willing, and able buyer and the sale ultimately closes under terms acceptable to the seller. This reflects that the broker earns the fee by successfully bringing and closing a transaction, not merely by listing the property. A guaranteed sale at listing price isn’t a typical condition of earning a commission, listing contracts aren’t limited to residential properties unless specified, and a properly drafted listing contract is enforceable.