Question

Broker Sam presents an offer to his client, seller Gloria. The offer is a full price...

Broker Sam presents an offer to his client, seller Gloria. The offer is a full price cash offer with no contingencies. Which of the following statements is true? A) Gloria must accept the offer B) Gloria will lose the earnest money deposit if she refuses the offer C) Sam is legally entitled to the agreed upon commission even if Gloria refuses the offer. D) Sam can collect the earnest money as commission if Gloria refuses the offer.
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Answer #1

The correct answer is Option C.

Explanation for Incorrect options
Option A- Gloria has a choice to accept or reject the offer. Hence, there is no compulsion for acceptance of every offer by her broker.

Option B- Earnest money deposit is refundable deposit. Hence, if Gloria refuses the offer the broker cannot forfeit such deposits.

Option D- The commission for broker Sam shall be as agreed before entering the contract. The entire earnest money cannot be treated as commission if Gloria refuses the offer.

Explanation for Correct options
Option C- The commission for broker Sam shall be as agreed before entering the contract. This amount is entitled to the broker even if Gloria accepts or refuses the offer.

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