Minnesota State Real Estate Practice Test

What happens to a broker's entitlement to commission if an accepted offer is canceled?

1. The broker loses all rights to commission

2. The broker is entitled to commission due to written acceptance

3. The broker may only collect if the buyer cancels

4. The broker needs to renegotiate the terms

The correct answer is: The broker is entitled to commission due to written acceptance

When a broker secures an accepted offer, they establish a binding agreement that typically entitles them to a commission for their services. Even if that accepted offer is later canceled, the broker's entitlement to commission remains intact due to the fact that they successfully facilitated an agreement between the parties involved. This entitlement exists because the contract for commission is often based on the broker's role in bringing about a legitimate offer that was accepted by both the buyer and the seller. Unless there are specific conditions outlined in the brokerage agreement that state otherwise, the commission is still owed to the broker even if the sale does not eventually go through. Understanding this principle is essential for those in the real estate profession, as it underscores the importance of recognizing the broker's role in the transaction process. Thus, the idea that a broker is entitled to a commission as a result of written acceptance is a foundational element in real estate transactions, highlighting the broker's contribution to the progression of the sale.