California Real Estate Practice Exam

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When is a real estate commission generally earned in the contract process?

  1. Listing of the property

  2. Signing of the contract

  3. Upon mutual consent

  4. Closing of the sale

The correct answer is: Upon mutual consent

Real estate commission is generally earned upon mutual consent, which usually occurs when the buyer and seller reach a mutual agreement on the terms and conditions of the sale. Listing of the property (choice A) refers to when the property is put on the market, but the commission is not earned at this point. Signing of the contract (choice B) is a step in the contract process, but it does not indicate mutual consent between both parties. Closing of the sale (choice D) is the final step in the contract process, but the commission is typically earned before this point. Therefore, C is the best answer as it accurately reflects the point at which the commission is earned in the contract process.

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