Final answer:
A real estate broker receiving a commission that includes cash and a business opportunity is getting a mixed commission. This arrangement combines a cash payout with potential future returns from the business, requiring careful evaluation to ensure its value.
Step-by-step explanation:
When a real estate broker receives compensation that includes both cash and a stake in a business opportunity, the payment is considered a mixed commission. This form of compensation combines immediate monetary reward with an investment aspect, which might represent shared ownership or some future financial return linked to the business's performance. It is important for the broker to understand the value and risks associated with this kind of payment in order to weigh it against a traditional cash-only commission.
The inclusion of a business opportunity as part of the payment can be viewed as a form of equity payment or profit-sharing. Before accepting such an offer, the broker should thoroughly evaluate the business opportunity, considering factors like the business's viability, market conditions, and potential for growth or profit. Comprehensive due diligence is essential to avoid situations similar to the overpromised and undelivered opportunities described in figure 25.3, where investors were lured by hard-sell techniques and ended up losing their investments.