25. A property is listed for $475,000. Under a buyer broker agreement, the buyer offers to compensate their licensee 3% of the sales price. The licensee and their brokerage split commissions 50/50. An offer for $470,000 is agreed upon. How much will the buyer pay in commission to the brokerage?
Answer: B
The buyer will pay $14,100 in commission to the brokerage.
In this scenario, the buyer's broker is entitled to a commission of 3% of the agreed sales price of $470,000. This results in a total commission of $14,100, which is the correct answer.
A) $14,250
This option is incorrect because it represents a 3% commission on the original listing price of $475,000, rather than the agreed sales price of $470,000. The correct calculation must be based on the final sale price.
B) $14,100
This option is correct as it reflects a 3% commission on the agreed price of $470,000. The calculation is as follows: 0.03 × $470,000 = $14,100, which accurately represents the commission owed by the buyer to the brokerage.
C) $7,125
This option is incorrect because it does not represent the full commission owed. It appears to be a miscalculation, as it does not take into account the full 3% commission on the agreed sales price of $470,000.
D) $7,050
This option is also incorrect as it represents an even lower commission amount. Similar to option C, this does not correctly apply the 3% commission on the agreed sale price and therefore does not reflect the actual amount owed.
Conclusion
The correct answer is $14,100 because it accurately calculates the commission based on the agreed sales price of $470,000 at a rate of 3%. All other options fail to reflect the correct application of the commission rate to the final sale price, leading to incorrect totals.