Question 15

The compensation for an agent in an employment agreement is determined by the agent and client.

The compensation for an agent in an employment agreement is typically negotiated and agreed upon by both the agent and the client, ensuring that both parties have a clear understanding of the terms.

A) agent and client

This option is correct because the compensation is a mutual agreement between the agent and the client. Both parties discuss and agree on the terms of the compensation in the context of the employment agreement.

B) local REALTOR® association

This option is incorrect as the local REALTOR® association does not determine compensation for individual agents. While they may provide guidelines or standards, the specific compensation is ultimately negotiated between the agent and the client.

C) client only

This option is incorrect because the client alone does not have the authority to set compensation. The agreement must involve the agent, as both parties need to consent to the terms of the compensation in the employment agreement.

D) agent only

This option is incorrect since the agent alone cannot dictate their compensation in an employment agreement. The arrangement requires the involvement and agreement of the client, making it a collaborative decision.

Conclusion

The correct answer, "agent and client," reflects the essential collaborative nature of determining compensation in an employment agreement. All other options fail to recognize the necessity of mutual agreement in establishing the terms of compensation between the involved parties.