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 commission from the sale is calculated based on the closing price of $350,000. With a 5% commission agreed upon, the total commission is $17,500, and since the buyer's broker receives 60% of that, their amount comes to $10,500.

A ($7,000) YOUR ANSWER

This amount represents 40% of the total commission, which is not the share that the buyer's broker receives. The buyer's broker is entitled to 60% of the total commission, making this option incorrect.

B ($10,500) CORRECT

This is the correct calculation based on the total commission of $17,500, derived from 5% of the closing price of $350,000. The buyer's broker's share of 60% from this total leads to the correct amount of $10,500.

C ($17,000) YOUR ANSWER

This figure does not accurately reflect the commission distribution. It would imply that the buyer's broker receives a higher percentage than the agreed 60%, which is not the case. Therefore, this choice is incorrect.

D ($17,500) YOUR ANSWER

This amount represents the total commission based on the closing price, but it does not account for the division of the commission between brokers. The buyer's broker only receives 60% of this total, making this option incorrect.

Conclusion

The proper commission for the buyer's broker is calculated based on the total sale price and the agreed percentage split. With a total commission of $17,500 on a closing sale of $350,000, the buyer's broker's share of 60% results in $10,500. Understanding the distribution of commissions is essential in real estate transactions to ensure all parties receive their correct entitlements.

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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