Question

The sellers, Mr. and Mrs. Hernandez, listed their property for $112,000 and agreed to an exclusive right to sell listing agreement at a 4% commission to be paid to Lucky Nines Estate Company at closing. The sellers sold the property themselves during the listing period for $106,000. How much commission, if any, would Lucky Nines Real Estate Company be entitled to at closing?

a) $4,240
b) $4,480
c) $0
d) $4,360

Answer 1

4480

Explanation:

Seller has sold the property within the lisitng period by themselves , it is in violation of the listing contract because within this period real state agent has the obligation to sell on behalf of the owner, ,should the owner decides to sell themselves in this listing period they would be oblidged to pay the agreed upon comission to the company .

here in this case 4% of 112,000 = 4480.

Answer 2

commission = $4,240 ; A

Explanation:

Given:

- Property listed value = $112,000

- The listing period value = $106,000

- Commission = 4%

Find:

How much commission, if any, would Lucky Nines Real Estate Company be entitled to at closing?

Solution:

- We need to know that the commission is gained on the sold value of listing period not the listed value originally. Hence, the amount of commission paid is:

commission = Rate*listing period value

commission = 0.04*$106,000

commission = $4,240