Question

J made a $100 earnest money deposit on a 4-plex and wisely used a real estate agent to assist him with the paperwork. The agent charged him a 2% commission. The real estate agent wisely put the deposit in the brokerage's trust account. The home later sold for $50,500. How much will the escrow company pay the agent's brokerage?

(a) $1,110
(b) $900
(c) $910
(d) $1,010

Answer 1

The escrow company will pay the agent's brokerage a commission of $1,010, based on a 2% commission rate and the final selling price of the home at $50,500.

Step-by-step explanation:

To calculate the amount the escrow company will pay the agent's brokerage, we need to determine the agent's commission based on the selling price of the home. Since the agent's commission rate is 2%, we apply this percentage to the final selling price of the home, which is $50,500.

The calculation will be as follows:

Commission = Selling Price x Commission Rate

Commission = $50,500 x 0.02

Commission = $1,010

Therefore, the escrow company will pay the agent's brokerage $1,010, which is option (d).