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Practice Of Real EstateBrokerage_operationsHARD

A supervising broker discovers that an agent has been collecting commission checks directly from clients instead of routing them through the brokerage. What is the primary concern?

Correct Answer

D) The agent may be operating without proper supervision, and commissions must generally be paid through the employing broker

In most jurisdictions, commissions must be paid to the employing broker, who then distributes the agent's share. An agent collecting commissions directly bypasses required broker supervision and violates licensing laws.

Answer Options
A
The agent has violated antitrust law
B
The clients should have paid the commission to the MLS
C
This is acceptable as long as the agent reports the income
D
The agent may be operating without proper supervision, and commissions must generally be paid through the employing broker

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Related Topics & Key Terms

Key Terms:

brokerage_operationspracticebroker_supervisioncommission

Related Concepts

Commingling is the illegal act of mixing client funds with a broker's personal or business operating funds, while conversion is the unauthorized use of client funds for the broker's own benefit. Both are serious violations that can result in license revocation.

Commingling is the illegal act of mixing client trust funds with a broker's personal or business operating funds; conversion is the misappropriation of those funds.

Continuing education (CE) refers to the ongoing coursework that licensed real estate professionals must complete during each renewal cycle to maintain an active license. CE ensures agents stay current with changes in laws, regulations, and industry practices.

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