In an exclusive agency agreement, when does the broker receive compensation?

In an exclusive agency agreement, the broker receives compensation only if they are the one who finds the buyer for the property. This agreement allows the seller to retain the right to sell the property on their own without owing a commission to the broker in that scenario. However, if the broker is involved in finding a buyer, they will be entitled to the agreed-upon compensation.

The structures of different real estate agreements stipulate various conditions for compensation. In an exclusive agency agreement, the broker is incentivized to actively pursue a buyer, as their commission hinges on successfully closing a sale involving their efforts, emphasizing the broker's role in the transaction. Thus, the specifics of this arrangement highlight the importance of the broker's active participation in securing a buyer.