22. A broker lists a property at $340,000. The seller agrees to a 5% commission with 60% going to the buyer's broker. Property successfully closes at $350,000. The buyer's broker will receive:
Answer: B
The buyer's broker will receive $10,500.
The buyer's broker's commission is calculated based on the final sale price of the property and the agreed commission structure. With a 5% commission on the final sale price of $350,000, the buyer's broker receives 60% of that amount.
A) $7,000
This option is incorrect because it does not reflect the correct calculation of the buyer's broker's commission. A 5% commission on the closing price of $350,000 would yield a higher amount than $7,000.
B) $10,500
This is the correct answer. The total commission from the closing price of $350,000 is $17,500 (5% of $350,000). Since the buyer's broker receives 60% of this total commission, the calculation is $17,500 x 0.60 = $10,500.
C) $17,000
This option is incorrect because it overestimates the buyer's broker's share of the commission. The calculation does not account for the 60% allocation of the total commission but rather misinterprets the total commission amount itself.
D) $17,500
This option is also incorrect because it represents the total commission of 5% on the closing price rather than the portion that the buyer's broker receives. The buyer's broker only gets 60% of this total, not the full amount.
Conclusion
The correct answer is $10,500, as it accurately represents the buyer's broker's commission based on the agreed 5% of the sale price and the 60% allocation of that commission. All other options miscalculate either the total commission or the broker's share, failing to align with the stipulated commission agreement.