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 the buyer's broker 55% of this commission, the listing brokerage retains $8,775.

A ($8,775) CORRECT

This amount represents the commission retained by the listing brokerage after paying out the buyer's broker. The total commission of $19,500 is calculated as 6% of $325,000. The buyer's broker receives 55% of this, which is $10,725, leaving the listing brokerage with $8,775.

B ($9,750) YOUR ANSWER

This value incorrectly represents the commission amount retained by the listing brokerage. To calculate the correct amount, one must first determine the total commission of $19,500 and deduct the buyer's broker's share of $10,725. This results in a retention of $8,775, not $9,750.

C ($10,725) YOUR ANSWER

This figure corresponds to the amount paid to the buyer's broker, which is 55% of the total commission. It does not reflect the amount retained by the listing brokerage. The true retention, after the buyer's broker is compensated, is $8,775.

D ($19,500) YOUR ANSWER

This choice represents the total commission earned from the sale, not the amount remaining with the listing brokerage. After the buyer's broker receives their share, the listing brokerage is left with $8,775, which is a fraction of the total commission.

Conclusion

In this commission structure, the listing brokerage retains $8,775 after paying the buyer's broker their share. Understanding how to properly calculate commission distributions is crucial for real estate professionals, as it directly impacts their earnings from transactions. The total commission, the division of fees, and the resulting amounts retained are key factors in real estate financial management.

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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