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

$10,500

The buyer's broker will receive a commission of $10,500 based on the agreed commission structure and the final sale price of the property. The total commission is calculated from the closing price, and the buyer's broker receives 60% of that commission.

A ($7,000) YOUR ANSWER

This amount would imply a total commission of $11,666.67, calculated from a closing price of $233,333.34, which does not align with the actual sale price of $350,000. Therefore, it reflects an incorrect understanding of the commission calculation.

B ($10,500) CORRECT

This is the correct calculation. The total commission on a sale price of $350,000 at a 5% commission rate is $17,500. Since the buyer's broker receives 60% of this amount, they will earn $10,500 ($17,500 * 0.60 = $10,500).

C ($17,000) YOUR ANSWER

This figure suggests that the buyer's broker would receive approximately 97.14% of the total commission, which is inaccurate given the 60% agreement. This misinterpretation of the commission split leads to an incorrect total for the buyer's broker.

D ($17,500) YOUR ANSWER

This amount represents the total commission from the sale, not the portion allocated to the buyer's broker. The buyer's broker's share is only 60% of the total commission, which is why this figure is incorrect for the question asked.

Conclusion

The buyer's broker will receive $10,500 from the property sale, which is derived from 60% of the total commission calculated on the closing price of $350,000. Understanding the commission structure is key to determining the correct amount received by the buyer's broker, distinguishing their share from the total commission.

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:

$10,500

Related Questions

Related Quizzes

How familiar were you with this question?

Report an Issue

Rate this Practice Test