Massachusetts License Law
Under Massachusetts law, a broker may keep their commission from a transaction even if the buyer later defaults on the mortgage, provided:
AThe seller demands the commission be refunded
BThe broker procured a ready, willing, and able buyer who entered into an enforceable contract✓ Correct
CThe loan was approved at the time of offer
DThe closing actually occurs and funds are disbursed
Explanation
In Massachusetts, a broker earns their commission when they produce a ready, willing, and able buyer who enters into an enforceable purchase contract on the seller's terms. Whether the sale ultimately closes due to buyer default does not necessarily forfeit the commission.
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Key Terms to Know
Contingency
A condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
Math Concepts
State-Specific Concepts
License Law
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