A property sells for $100,000 and the commission charged by Listing Company A is 5.5%. It was sold by Company X through the multiple listing service with an indicated cooperative fee of 2.5%. How much will Company X receive?

Rationale

Company X will receive $2,500.

The total commission on the sale of the property is calculated at 5.5% of $100,000, which totals $5,500. Company X, as the cooperating broker, receives the indicated cooperative fee of 2.5% from the total sale price, amounting to $2,500.

A ($2,500) CORRECT

This choice correctly calculates Company X's earnings based on the cooperative fee of 2.5% of the property’s sale price. Therefore, Company X will receive $100,000 * 0.025 = $2,500.

B ($3,000) YOUR ANSWER

This option incorrectly assumes a higher commission for Company X than the stipulated 2.5%. To reach $3,000, Company X would need to have a commission rate of 3% on the sale price, which is not applicable in this scenario.

C ($5,500) YOUR ANSWER

This choice represents the total commission charged by Listing Company A at 5.5% of the sale price. However, this amount does not reflect the earnings for Company X, which only receives the cooperative fee of 2.5% for its role in the transaction.

D ($8,000) YOUR ANSWER

This option is incorrect as it suggests an inflated amount that does not correlate with any commission rate given in the problem. For Company X to receive $8,000, the cooperative fee would need to be 8% of the sale price, which is not provided in this situation.

Conclusion

Company X's compensation is strictly determined by the cooperative fee of 2.5% from the total sale price of $100,000, resulting in an income of $2,500. Other choices either misinterpret the commission structure or calculate amounts that do not align with the defined cooperative fee, reinforcing the importance of accurately applying commission percentages in real estate transactions.

A property sells for $100,000 and the commission charged by Listing Company A is 5.5%. It was sold by Company X through the multiple listing service with an indicated cooperative fee of 2.5%. How much will Company X receive?

Company X will receive $2,500.

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