Question

Lamar sells another broker's $800,000 listing for $785,000 at a commission rate of 6.5%. Lamar has a 40% commission split with his broker. If there is also a 50% brokerage split, what commission will Lamar receive?

Answer 1

Lamar will receive $10,205.

Explanation:

Lamar sells another broker's $800,000 listing for $785,000 at a commission rate of 6.5%.

Commission that Lamar got is:

`0.065*785000=51025` dollars

Lamar has a 40% commission split with his broker.

So, amount of 40% of $51,025 becomes :

`0.40*51025=20410` dollars.

Also given that there is also a 50% brokerage split; so amount after split becomes:

`0.50*20410=10205` dollars

Therefore, Lamar will receive $10,205.

Answer 2

Total commission that Lamar got is:
6.5/100×785,000
=$51,025
Amount that Lamar split with his broker:
40/100×51025
=$20410
Amount that brokerage split
=50/100×20410
$10205

Total amount Lamar received $10205