Question

In: Finance

You work for ABC Realty in Omaha, where you recently representeda client as a buyer’s...

You work for ABC Realty in Omaha, where you recently represented a client as a buyer’s exclusive agent. The buyer purchased a $350,000 house, where the listing agreement specified that a 6% commission would be paid at closing.

a)What is the total commission paid by the seller at closing?

b)What is the commission due to ABC Realty if the seller/buyer broker split is 60/40 (60% to seller’s broker, 40% to buyer’s broker)?

c)What commission will you receive if you have a 65% split with your broker?

Solutions

Expert Solution

a. total commission paid by the seller = house price * commission

total commission paid by the seller = 350000 * 6%

Total commission paid by the seller = $21000

b. Commission due to ABC Realty = Commission Amount * 40%

Commission due to ABC Realty = 21000 * 40%

Commission due to ABC Realty = 8400

c. commission we receive if 65% split with broker = Commission received by ABC realty * (1 - Broker %)

commission we receive if 65% split with broker = 8400 * (1 - 0.65)

commission we receive if 65% split with broker = $2940


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