What happens to the broker's commission if a sale fails due to unmarketable title?

In a real estate transaction, when a sale fails due to unmarketable title, the broker's commission may still be impacted, but not in the manner suggested by the provided answer. Generally, the entitlement to a commission hinges on the broker fulfilling their obligations as set out in the listing agreement.

Typically, a broker earns a commission when they successfully facilitate a sale that closes. If a title is deemed unmarketable and the sale fails, it indicates that the conditions to close the transaction were not met, which can affect the broker’s right to the commission.

Therefore, under the circumstances where the sale does not proceed due to title issues, brokers often do not retain their commission, as the sale did not close successfully. Each situation can vary based on the details of the listing agreement and the circumstances surrounding the title issue, but a fundamental aspect is that brokers are typically compensated for completed transactions rather than for efforts that do not culminate successfully.

Thus, the assertion that the broker still receives commission regardless of marketability of title does not accurately reflect standard practices in real estate transactions. Instead, the commission is generally contingent upon the successful closing of the sale.