AZ Real Estate Broker Entitled to Commission if Contract is Mutually Cancelled

A contract was signed to sell a home in Goodyear. The buyer qualified for a new loan and, with the exception of minor repairs that the homeowners fixed, the buyer was satisfied with the home inspection. Two weeks before closing, however, the buyer contacted the sellers saying he no longer wanted to buy the home. As it turned out the sellers were no longer anxious to sell the home, so they agreed with the buyer to cancel the sale. The listing broker was contacted to cancel the transaction, and she said that she was entitled to her real estate commission. The sellers are fine to compensate the listing broker for her time and expenses, but have refused to pay the full commission. Is this an Arizona real estate law that the listing broker receives her full compensation?

While it is not a law, but the general rule is that a listing broker has earned a commission if the broker produces a ready, willing and able buyer at a price agreeable to the seller. If there are any material contingencies such as financing or a home inspection, however, the buyer is not a ready, willing and able buyer until the material contingencies are removed. Assuming that all material contingencies have been removed in this case the listing broker earned her real estate commission. The fact that seller and buyer mutually cancelled the sale does not affect the listing broker’s right to her real estate commission. Furthermore, the buyer’s broker has a claim against the listing broker for any “co-brokerage” commission offered by the listing broker in the Multiple Listing Service. clgz05

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