In Oregon the amount a broker may charge for commission is:
Audio Lesson
Duration: 2:21
Question & Answer
Review the question and all answer choices
6%
CORRECT_ANSWER
Up to 6%
CORRECT_ANSWER
Up to 7%
CORRECT_ANSWER
Negotiable
Why is this correct?
In Oregon, broker commissions are entirely negotiable between the broker and client. There is no state-mandated maximum or standard rate. This free-market approach allows brokers to establish competitive rates based on market conditions, property type, and services provided.
Deep Analysis
AI-powered in-depth explanation of this concept
Commission structures are fundamental to real estate practice as they directly impact agents' income and clients' costs. This question tests understanding of Oregon's regulations regarding broker commissions. The core concept is that commissions are negotiable between the broker and client, not fixed by law. Many students mistakenly believe standard commission rates are legally mandated, which is a dangerous misconception. In reality, Oregon follows the free-market principle where commissions are determined by market forces and negotiation. The correct answer (D) reflects this legal reality. This question challenges students by presenting fixed percentage options (A, B, C) that represent common industry practices but not legal requirements. Understanding this distinction is crucial for both exam purposes and practical real estate work, as brokers must know their regulatory boundaries while effectively serving clients' needs.
Knowledge Background
Essential context and foundational knowledge
Commission regulation in real estate primarily concerns antitrust laws rather than fixed rates. Oregon, like most states, follows the federal policy established by the Sherman Act that prohibits price-fixing agreements among competitors. While industry standards exist (often around 5-6%), these are market conventions, not legal requirements. Brokers must negotiate commissions independently with each client, and any attempt to establish standard rates across the industry could constitute illegal price-fixing. This regulatory framework promotes competition while protecting consumers from artificially inflated costs.
Think of real estate commissions like negotiating a salary in a job market. There might be typical ranges, but your actual pay is what you and your employer agree upon, not a fixed government rate.
When you see percentage options on commission questions, remind yourself 'salary negotiation, not tax rate' to remember that commissions are negotiable, not fixed.
When encountering commission questions, look for keywords like 'negotiable' or 'determined by market.' Avoid percentage options unless the question specifically references industry standards or customs.
Real World Application
How this concept applies in actual real estate practice
Sarah, a new Oregon broker, meets with potential clients who ask if she charges the 'standard' 6% commission. She confidently explains that her commission is negotiable and asks about their expectations and needs. After discussing the property's unique features and the marketing strategy she proposes, they agree on a 5.5% commission. Sarah properly documents this agreement in her listing contract, demonstrating both her knowledge of negotiable commissions and her commitment to transparency.
More Practice of Real Estate Episodes
Continue learning with related audio lessons
Is commingling legal in Colorado?
2:25 • 0 plays
Maximum from Maryland Guarantee Fund per transaction is:
2:38 • 0 plays
In Colorado the amount a broker may charge for commission is:
2:36 • 0 plays
Montana has license reciprocity with:
2:33 • 0 plays
How long must real estate brokers keep records in Minnesota?
2:33 • 0 plays
Ready to Ace Your Real Estate Exam?
Access 2,499+ free podcast episodes covering all 11 exam topics.