National Real Estate Exam (PSI)Real Estate CalculationsEasy
A home sells for $180,000. The listing brokerage earns $10,800 in commission on the sale. What commission rate was charged?
- A7%
- B6%
- C6.5%
- D5%
Show answer & explanationAnswer & explanation
Correct answer: B. 6%
Divide the commission dollar amount by the sale price: $10,800 ÷ $180,000 = 0.06, or 6%. This reverses the usual commission calculation to solve for the rate instead of the dollar amount.
Why the other options are wrong
- A. 7% of $180,000 would be $12,600, too high.
- C. 6.5% of $180,000 would be $11,700, too high.
- D. 5% of $180,000 would be $9,000, too low.
Solving for Commission Rate
When the sale price and commission dollar amount are known, the rate is found by dividing commission by sale price.
- Rate = Commission ÷ Sale Price
- Always convert decimal to percentage
- Check math by multiplying rate back into sale price
Memory trick: Divide the check by the price to find the price of the deal.