A property sells for $200,000 and the commission charged by Listing Company A is 6.5%. It was sold by Company X through the multiple listing service with an indicated cooperative fee of 2%. How much will the cooperating company receive?

Rationale

The cooperating company will receive $4,000.

To calculate the amount the cooperating company receives, we first determine the total commission from the sale, which is 6.5% of $200,000, equating to $13,000. The cooperative fee indicated is 2% of the sale price, which amounts to $4,000. Therefore, the cooperating company will receive this amount.

A ($1,300) YOUR ANSWER

This amount represents 1% of the sale price ($200,000), which is not relevant to the commission structure in this scenario. The commission structure indicates a 6.5% total commission, with 2% allocated to the cooperating company, resulting in a significantly higher payout.

B ($4,000) CORRECT

This is the correct calculation based on the cooperative fee of 2% of the sale price of $200,000. The calculation is straightforward: 0.02 x $200,000 = $4,000. This amount directly corresponds to what the cooperating company earns from the transaction.

C ($9,000) YOUR ANSWER

This figure does not relate to any percentage of the sale price or commission structure outlined. The total commission from the sale is $13,000, and the cooperating company receives only 2% of the sale price, which is far less than this amount.

D ($13,000) YOUR ANSWER

This total represents the full commission earned by Listing Company A, which is 6.5% of the sale price. However, only a part of this commission, specifically the 2% cooperative fee, is paid to the cooperating company, which amounts to $4,000, not the entire commission.

Conclusion

The cooperating company receives $4,000 from the sale of the property, calculated as 2% of the sale price of $200,000. Understanding the breakdown of the total commission is crucial in accurately determining the earnings of the cooperating company, as it is only entitled to a fraction of the total commission earned by the listing company.

A property sells for $200,000 and the commission charged by Listing Company A is 6.5%. It was sold by Company X through the multiple listing service with an indicated cooperative fee of 2%. How much will the cooperating company receive?

The cooperating company will receive $4,000.

Related Questions

Related Quizzes

How familiar were you with this question?

Report an Issue

Rate this Practice Test