Contracts
In Michigan, a real estate broker's right to a commission is typically earned when:
AThe listing agreement is signed
BThe broker procures a ready, willing, and able buyer on the seller's terms✓ Correct
CThe transaction closes and the deed is recorded
DThe buyer's earnest money clears the bank
Explanation
Under traditional Michigan common law, a broker earns their commission when they procure a ready, willing, and able buyer. However, most Michigan listing agreements now specify that commission is earned only upon closing.
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Key Terms to Know
Earnest Money
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
Listing AgreementA contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.
DeedA written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Math Concepts
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