Question

The seller agrees to pay the listing real estate agent a commission of 5%. The property is listed at $400,000, the buyer offers and seller agrees on price of $380,000 and it closes at that price. The buyer obtains a loan of $300,000. The property is tax assessed at $350,000. The commission most likely paid to the real estate agent is:__________
A. No commission is owed because it did not sell at the list price
B. $17,500
C. $20,000
D. $19,000

Answer 1

Answer:

C. $20,000

Explanation:

Note that we are talking about the listing commission. Listing commission will be calculated on the listed price.

So, the listed price will be = 400,000 * 5%

= $20,000

Thus, the commission most likely paid to the real estate agent is $20,000