Definition
In real estate, the term “Ready, Willing, and Able” refers to a prospective buyer who meets three specific criteria:
- Ready: The buyer is prepared and intends to make a purchase.
- Willing: The buyer agrees to the terms and conditions set forth in the listing agreement.
- Able: The buyer has the financial means or resources necessary to complete the transaction.
When a real estate broker finds a buyer who meets all three criteria, they have met the contractual obligations of a listing agreement and are entitled to receive their commission, even if the sale does not ultimately close due to reasons not attributable to the broker.
Examples
Example 1: A real estate broker has a listing agreement with a seller to sell their property for $500,000. The broker finds a buyer who agrees to purchase the property for the asking price and has been pre-approved for a mortgage of $500,000. This buyer is considered “ready, willing, and able.”
Example 2: A broker lists a commercial property and finds an Investor ready to purchase and willing to accept the terms of the listing. The investor demonstrates the financial capacity by showing proof of funds in their bank account, making them “ready, willing, and able.”
Frequently Asked Questions
What happens if the buyer backs out of the deal?
If the buyer is initially determined to be “ready, willing, and able” but later backs out, the broker may still be entitled to their commission, depending on the terms of the listing agreement.
How is financial capability assessed?
Financial capability is often assessed through pre-approval letters from lenders, proof of funds, or other financial documentation that indicates the buyer can obtain the necessary financing.
Is the broker entitled to a commission if the seller backs out?
Yes, if the broker has found a “ready, willing, and able” buyer who meets the listing’s terms, they have fulfilled their obligation and are entitled to a commission, even if the sale is not finalized due to the seller’s actions.
What if the buyer and seller negotiate different terms?
If the buyer and seller negotiate terms that differ from the original listing, it depends on the specifics of those changes and whether the broker facilitates a new arrangement that both parties accept.
Does “ready, willing, and able” apply to renters?
The term is predominantly used in sales but can apply to rental agreements where a broker finds a tenant ready, willing, and able to meet the rental terms.
Related Terms
Listing Agreement
A contract between a property owner and a real estate broker authorizing the broker to find a buyer or tenant for the property.
Commission
A fee paid to a broker for their services, typically a percentage of the property’s sale price.
Pre-Approval
A lender’s assessment that a buyer qualifies for a mortgage loan based on financial information provided.
Contingency
A condition in a contract that must be met for the transaction to proceed to closing.
Online References
Suggested Books
- “The Real Estate Agent’s Guide to Real Estate” by John W. Reilly and Marie S. Spodek
- “Real Estate Brokerage: A Guide to Success” by John E. Cyr and Rebecca L. Tangeman
- “Your First Year in Real Estate” by Dirk Zeller
Fundamentals of Ready, Willing, and Able: Real Estate Transactions Basics Quiz
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