A buyer's agent compensation can be structured as:
Question & Answer
Review the question and all answer choices
Only a percentage of the sale price
Option A is incorrect because it's too restrictive. While a percentage of sale price is common, it's not the only allowable compensation structure. This misconception likely stems from familiarity with seller agent compensation, which is typically commission-based.
A flat fee, percentage, or hourly rate
Only a flat fee
Option C is incorrect because a flat fee is only one of several possible compensation structures. This error reflects a misunderstanding of the flexibility in compensation arrangements for buyer agents.
Only an hourly rate
Option D is incorrect because an hourly rate is just one possible structure among several. This misconception may arise from confusing real estate services with other professional services where hourly billing is the standard.
Why is this correct?
The correct answer is B because buyer agent compensation is indeed flexible and can be structured as a flat fee, percentage of sale price, hourly rate, or combination thereof. The key principle is that compensation terms must be clearly specified in the written buyer representation agreement.
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