22. 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.
The buyer's commission is calculated as 3% of the agreed sales price of $470,000. This results in a total commission of $14,100, which is then split between the licensee and their brokerage.
A) 14,250
This option is incorrect because it represents 3% of the original listing price of $475,000, rather than the agreed sales price of $470,000. Therefore, it does not reflect the actual commission based on the final transaction amount.
B) 14,100
This option is correct as it accurately represents 3% of the agreed sales price of $470,000. The calculation is as follows: 0.03 x 470,000 = 14,100. This is the total commission that will be paid to the brokerage.
C) 7,125
This option is incorrect because it does not account for the full commission based on the agreed sales price. It seems to suggest a different percentage or a misunderstanding of the commission structure, as it does not reflect the 3% calculation on the $470,000 price.
D) 7,050
This option is incorrect as well. It could potentially represent a miscalculation or an application of the commission rate to an incorrect amount. The correct calculation of 3% of the sales price should yield a higher figure than this.
Conclusion
The correct answer, $14,100, is derived from the appropriate percentage applied to the final agreed sales price of $470,000. All other options fail to represent the correct commission calculation based on the actual transaction, making them invalid in this context. Thus, B is the definitive correct answer.