Broker Quinn has a listing agreement with Seller Reed. The agreement specifies a 5% commission. A buyer's agent brings an offer contingent on the seller paying 3% to the buyer's agent. Under the listing agreement, how is the commission structured?
Correct Answer
A) The 3% to the buyer's broker is deducted from the 5% total, per the listing agreement's cooperative compensation terms
Typically, the cooperative compensation offered to the buyer's broker comes out of the total commission in the listing agreement. If the listing agreement offers 3% to cooperating brokers, that is deducted from the 5% total, leaving 2% for the listing broker.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The legal obligation to reveal information that could affect a party's decision to enter into or the terms of a real estate transaction.
The extent of power and actions an agent is authorized to perform on behalf of the principal, as defined by the agency agreement.
The fiduciary obligations owed by a listing agent to the seller, including marketing the property, presenting all offers, and protecting the seller's confidential information.
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