Commission

### How is a real estate commission typically calculated? - [x] As a percentage of the property's sale price - [ ] As a flat fee - [ ] Based on the number of showings the property received - [ ] As a percentage of the property's appraised value > **Explanation:** The commission is customarily calculated as a percentage of the final sale price of the property transacted. ### Who usually pays the real estate commission in a transaction? - [ ] The buyer - [x] The seller - [ ] The lending bank - [ ] The title company > **Explanation:** The seller generally pays the commission, which is typically split between the seller's and buyer's brokers. ### Is the real estate commission rate fixed by law? - [ ] Yes, it is fixed by federal law. - [ ] Yes, it is fixed by state law. - [x] No, it can be negotiated. - [ ] No, but it must be above 5%. > **Explanation:** The commission rate is not fixed by law and can be negotiated between the property owner and the real estate broker. ### What is a common first step in formally agreeing on commission terms? - [ ] Shaking hands - [ ] Oral confirmation - [ ] Receiving a bill - [x] Signing a listing agreement > **Explanation:** Typically, a listing agreement is signed that outlines the terms and the agreed-upon commission. ### Can a real estate agent represent both the buyer and the seller in the same transaction? - [ ] No, it's legally prohibited. - [x] Yes, through dual agency with disclosure and consent - [ ] Yes, without any special conditions. - [ ] No, unless they work for different brokers. > **Explanation:** A real estate agent can represent both parties in a dual agency situation, but full disclosure and consent from both parties are required. ### What would be the commission for a $500,000 house sold at a 5% rate? - [ ] $20,000 - [x] $25,000 - [ ] $15,000 - [ ] $10,000 > **Explanation:** With a 5% commission rate: \\[ \text{Commission} = \$500,000 \times 0.05 = \$25,000 \\]. ### What type of commission arrangement allows an agent to still collect a fee if the seller finds their own buyer? - [ ] Open listing - [ ] Exclusive buyer agency agreement - [x] Exclusive right-to-sell listing - [ ] Multiple listing service (MLS) > **Explanation:** In an exclusive right-to-sell listing, the agent earns a commission regardless of who finds the buyer—be it the agent or the seller. ### Who benefits from surety of receiving commissions? - [ ] The buyer’s mortgage lender - [ ] The title company - [ ] The home inspector - [x] The real estate agent or broker > **Explanation:** The agent/broker benefits as it guarantees their income for the services provided. ### What standard practice ensures fair understanding of commission rates between parties? - [x] Clear communication in the listing agreement - [ ] Monthly newsletters - [ ] Agency-provided pamphlets - [ ] Advertisement on real estate portals > **Explanation:** Clearly writing and including commission terms in the listing agreement ensures fair understanding between involved parties. ### How often does a real estate agent get paid a salary regardless of commission, typically? - [ ] Always - [x] Rarely - [ ] Frequently - [ ] Occasionally > **Explanation:** Real estate agents are rarely paid a flat salary; most operate on commission-based earnings specifically.