A property sold for $325,000 with a 6% sales commission as a fee. The listing broker paid 55% to the buyer's broker. How much of the fee remained with the listing brokerage?

Rationale

$8,775

The total sales commission on a property sold for $325,000 at a 6% rate amounts to $19,500. After paying 55% of this commission to the buyer's broker, the listing brokerage retains $8,775.

A ($8,775) CORRECT

This choice correctly represents the amount the listing brokerage retains after paying the buyer's broker. The total commission of $19,500 is calculated as 6% of $325,000. The listing brokerage pays 55% of this, which is $10,725, leaving them with $19,500 - $10,725 = $8,775.

B ($9,750) YOUR ANSWER

This option incorrectly suggests the amount left with the listing brokerage. It does not account for the correct commission distribution; instead, it is the result of an incorrect calculation that does not reflect the actual percentages involved in the commission split.

C ($10,725) YOUR ANSWER

This choice represents the amount paid to the buyer's broker, not the amount retained by the listing brokerage. It results from calculating 55% of the total commission ($19,500), which is incorrect if considering what remains with the listing brokerage.

D ($19,500) YOUR ANSWER

This option incorrectly indicates that the entire commission remains with the listing brokerage. However, this figure is the total commission before any distribution. The actual amount retained after paying the buyer's broker is significantly less.

Conclusion

The calculation of sales commissions in real estate transactions involves understanding the distribution of fees between brokers. In this scenario, the listing brokerage retains $8,775 after paying the buyer's broker their share. This highlights the importance of correctly applying percentage splits in commission calculations to determine the net earnings for each party involved.

A property sold for $325,000 with a 6% sales commission as a fee. The listing broker paid 55% to the buyer's broker. How much of the fee remained with the listing brokerage?

$8,775

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