Question

The seller and the listing agent agree to put the home on the market for $275,000, and at the same time agree to a 5.25% commission. The buyer and the buyer agent negotiate the home price to $260,000. How much commission is paid?

a) $1,365
b) $13,650
c) $6,825
d) $7,800

Answer 1

The commission paid on the sale of the home at the agreed commission rate of 5.25% on a selling price of $260,000 is $13,650.

Step-by-step explanation:

The question asks to calculate the commission paid on the sale of a home where the seller and listing agent agreed on a commission rate of 5.25%. The home, initially listed for $275,000, is eventually sold for $260,000. To find out the commission amount, we need to apply the commission rate to the final selling price.

The commission is calculated as follows:

Commission = Sale Price × Commission Rate

Commission = $260,000 × 0.0525

Commission = $13,650

Therefore, the commission paid on the sale of the home at the agreed rate of 5.25% is $13,650, which corresponds to option b).