Difficulty: Hard

Average Score: 0%

Broker P is the sole proprietor of XYZ Realty. P employs five salespersons, all of whom have been practicing real estate for at least two years. Under the license law, if P should die,

How much did the listing licensee receive?

Rationale

$1,894.75

To determine the amount the listing licensee received, we first calculate the total commission from the sale, which is 6.5% of the selling price of $106,000. This commission is then split between the listing and selling firms, and finally, we find the portion received by the listing licensee based on their share.

A ($1,894.75) CORRECT

This choice is correct. The total commission from the sale is calculated as $106,000 × 0.065 = $6,890. The commission is split equally, so each firm receives $6,890 ÷ 2 = $3,445. The listing licensee receives 55% of the listing office share: $3,445 × 0.55 = $1,894.75.

B ($1,966.25) YOUR ANSWER

This option is incorrect because it miscalculates the percentage of the listing office share that the listing licensee receives. It does not reflect the correct calculation of 55% of $3,445, which should yield $1,894.75 instead.

C ($3,575.00) YOUR ANSWER

This choice is incorrect as it assumes a different distribution of the commission or an incorrect calculation of the listing licensee's share. The listing licensee cannot receive this amount based on the given percentages and commission structure.

D ($3,789.50) YOUR ANSWER

This option is incorrect because it suggests that the listing licensee receives a higher percentage of the commission than actually calculated. The correct distribution based on the 55% share leads to a much lower figure.

Conclusion

The correct calculation reveals that the listing licensee receives $1,894.75 from the commission, based on a clear breakdown of the total commission and the specified percentages. Understanding the division of commission is crucial for accurately determining earnings in real estate transactions.

How much did the listing licensee receive?

$1,894.75

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