New York Real Estate Salesperson ExaminationReal Estate CalculationsEasy
A seller lists their property for $450,000. Their broker charges a 6% commission. If the seller agrees to pay an additional 1.5% bonus commission for a quick sale, and the property sells for $440,000, what is the total commission paid by the seller?
- A$26,400
- B$29,700
- C$30,800
- D$33,000
Show answer & explanationAnswer & explanation
Correct answer: C. $30,800
The total commission rate is 6% + 1.5% = 7.5%. The commission is calculated on the selling price of $440,000. So, $440,000 * 0.075 = $33,000.
Why the other options are wrong
- A. This calculates only the 6% commission on the selling price.
- B. This calculates 7.5% on the listing price, not the selling price.
- D. This is the correct total commission.
Total Commission Calculation
The total amount of money a seller pays to a broker based on the agreed-upon commission rate and the final selling price of the property.
- Calculated on the selling price, not the listing price.
- Includes all agreed-upon commission percentages.
- Typically paid by the seller at closing.
Memory trick: Selling price is the base, commission rate is the pace.