When is a licensee's compensation typically considered earned?

A licensee's compensation is typically considered earned when the client enters into a purchase contract. At this point, the agreement is formalized, indicating that the licensee has fulfilled their obligation to facilitate the transaction. This contract represents a mutual commitment between the buyer and seller, outlining the terms of the sale, and establishes the foundation for the licensee’s right to receive their commission.

It’s important to recognize that while other situations, such as when a buyer makes an offer or upon receipt of funds, may involve steps in the transaction process, they do not legally finalize the obligation of the parties involved as a signed purchase contract does. Likewise, the closing of the sale is often viewed as a final step, which may result in the payment of commission, but the right to that compensation is confirmed earlier, with the establishment of the contract.