A California broker takes a net listing on a home where the seller wants to net $620,000. The property sells for $680,000. The broker pays $4,000 in marketing expenses from the excess. Under this net listing arrangement, what is the broker's commission?
Correct Answer
A) $60,000
In a net listing, the broker's commission is the difference between the sale price and the seller's net amount. Commission = $680,000 − $620,000 = $60,000. Marketing expenses are the broker's own business costs and are not deducted from the commission calculation.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A non-agency relationship where the broker facilitates a real estate transaction without representing either party, owing limited duties of honesty, fairness, and competence to both.
The legal principle that holds a broker responsible for the actions of their agents and employees performed within the scope of the agency relationship.
An agency relationship created when a principal's actions or words lead a third party to reasonably believe that an agent has authority, and the principal fails to correct this belief.
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