At closing, a sale doesn't go through because the seller's anticipated transfer to another city gets suddenly postponed, and the seller no longer wants to sell. Does the seller owe the listing agent a commission in this situation?

• A. No, the seller is not liable if the sale fails
• B. Yes, because the seller won't provide marketable title which is considered a default
• C. Yes, but only if the listing agreement specifies it
• D. Only if the buyer defaults on financing

Answer: (B)

When a listing contract is in place, the broker earns the commission if they have produced a ready, willing, and able buyer and the deal fails only because the seller cannot perform. The seller’s obligation is to deliver marketable title at closing. If the seller postpones the transfer and can’t or won’t convey marketable title, that is a breach of the seller’s contractual duty. That breach prevents the closing and is treated as a default under the listing agreement, so the broker is still entitled to the commission for the services rendered in bringing the buyer and completing the contract to the point of closing. The issue isn’t the buyer’s financing; it’s the seller’s failure to provide marketable title.