Question 11

The amount of commission in an exclusive right-to-sell listing contract is determined by negotiation between the seller and the listing brokerage firm.

In an exclusive right-to-sell listing contract, the commission amount is negotiated directly between the seller and the listing brokerage firm that represents them. This negotiation is crucial as it defines the compensation for the services provided in selling the property.

A) Seller and buyer

This option is incorrect because the commission is not determined by negotiations between the seller and the buyer. The buyer typically does not have a role in setting the commission rate, as this is an agreement solely between the seller and their chosen brokerage.

B) Buyer and employing broker

This choice is also incorrect. The buyer does not negotiate the commission with the employing broker, as the commission is paid by the seller in an exclusive right-to-sell agreement. The buyer's relationship and negotiations typically concern the purchase price and terms of sale, not the commission.

C) Buyers broker and listing broker

This option is incorrect as well. While the buyer's broker may negotiate terms related to the buyer's offer, the commission itself is set by the seller and the listing brokerage firm. The buyer's broker's role does not include determining the commission.

D) Seller and the listing brokerage firm

This option is correct because the commission in an exclusive right-to-sell listing contract is established through negotiations between the seller and the listing brokerage firm. This direct negotiation ensures that both parties agree on the terms of compensation for the services rendered.

Conclusion

The correct answer is D, as it accurately reflects the dynamics of an exclusive right-to-sell listing contract where the seller negotiates the commission with the listing brokerage firm. All other options fail to recognize that the seller is the party responsible for negotiating commission rates, emphasizing the importance of this relationship in the real estate transaction process.