A broker lists a property at $340,000. The seller agrees to a 5% commission with 60% going to the buyer's broker. Property successfully closes at $350,000. The buyer's broker will receive

Rationale

The buyer's broker will receive $10,500.

The total commission on the sale is calculated from the final sale price of $350,000, which is subject to a 5% commission rate. This results in a total commission of $17,500, of which the buyer's broker receives 60%.

A (7,000) YOUR ANSWER

This amount represents a calculation based on a misunderstanding of the total commission. If the commission was incorrectly calculated as a lower percentage or based on an incorrect sale price, this figure might be suggested; however, it does not reflect the correct 60% share from the total commission.

B (10,500) CORRECT

This is the accurate calculation based on the total commission derived from the sale price. The total commission is 5% of $350,000, which equals $17,500. The buyer's broker receives 60% of that amount, calculated as $17,500 * 0.60 = $10,500.

C (17,000) YOUR ANSWER

This amount suggests a misunderstanding of the commission distribution. It appears to be based on an incorrect assumption about the percentage received by the buyer's broker or a miscalculation of the total commission, which should be 5% of the sale price, not a flat figure.

D (17,500) YOUR ANSWER

This figure represents the total commission based on the sale price of $350,000 at a 5% rate, rather than the amount allocated to the buyer's broker. It illustrates a common confusion between total commission and the broker's share.

Conclusion

In this scenario, the buyer's broker correctly receives $10,500, which is 60% of the total commission resulting from the sale of the property. Understanding the breakdown of commission percentages is crucial for accurate financial calculations in real estate transactions. The total commission derived from the sale price establishes the foundation for determining individual broker shares, reinforcing the importance of clear commission structures in real estate agreements.

A broker lists a property at $340,000. The seller agrees to a 5% commission with 60% going to the buyer's broker. Property successfully closes at $350,000. The buyer's broker will receive

The buyer's broker will receive $10,500.

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