What is the term for a situation where a real estate broker is paid a commission on a closed transaction?

In real estate, the term that best describes a situation where a broker receives payment specifically as a percentage of the sale price or a predetermined amount upon the successful closing of a transaction is commission-based compensation. This method is widely recognized and established in the real estate industry, as brokers typically earn a commission for the services provided, including marketing properties, negotiating terms, and facilitating the closing process.

Commission-based compensation aligns the broker's financial incentives with the successful outcome of a transaction, as their earnings depend on the completion and final price of the deal. This model serves to motivate brokers to work efficiently and effectively to secure the best terms for their clients.

The other options, while related to compensation structures, do not specifically express the concept of a broker earning a percentage or set fee upon closing a transaction in the same way that commission-based compensation does. Performance-based fees, for instance, may refer to different types of compensation related to achieving certain outcomes but do not typically apply to standard real estate transactions. Similarly, transaction-led compensation and fee-for-service arrangements convey different business models that do not specifically capture the traditional commission-based earnings of brokers.