Which statement about commission in a residential listing contract is correct?

The correct answer highlights a crucial aspect of real estate transactions, particularly regarding how commissions are structured in relation to option contracts. In real estate, an option contract grants a potential buyer the right, but not the obligation, to purchase a property within a specified timeframe and under predetermined conditions. When the seller accepts the option, the agent earns the commission at that moment, even though the actual sale may not occur until later.

This principle is rooted in the nature of the services provided by the agent. When an option is accepted, the agent has fulfilled their role by facilitating the agreement, which entitles them to commission based on the successful negotiation of the option rather than the subsequent completion of a sale. This reinforces the idea that a commission can be earned for securing an agreement that leads to a potential transaction, distinguishing it from situations where no agreement is reached or where the option expires without exercise.

Understanding this distinction is vital for real estate professionals to ensure they are compensated for the work performed in securing transactions that could lead to successful sales, even if those sales do not materialize immediately.