Humber/Ontario Real Estate Course 1 Exam Practice

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When a sale involves two different brokerages representing the seller and buyer, what is true about commission distribution?

  1. The brokerage working for the seller is known as the selling brokerage.

  2. The brokerage for the buyer is called the buyer's brokerage.

  3. If one brokerage’s commission-based remuneration is $24,000 and the sharing ratio is 80/20, the salesperson gets $19,200.

  4. If one brokerage receives commission of $24,000, and the split is 70/30, the salesperson gets $30%.

The correct answer is: If one brokerage’s commission-based remuneration is $24,000 and the sharing ratio is 80/20, the salesperson gets $19,200.

When a sale involves two different brokerages representing the seller and buyer, the commission distribution is determined by the sharing ratio. In this scenario, the selling brokerage would receive a commission of $24,000 and the sharing ratio is 80/20, meaning the brokerage keeps 80% of the commission and the salesperson receives 20%. Therefore, the salesperson would receive 20% of $24,000, which is $19,200. Option A is incorrect because it only mentions the selling brokerage and does not provide any information about commission distribution. Option B is incorrect because it only refers to the buyer's brokerage and does not provide any information about commission distribution. Option D is incorrect because it provides a percentage instead of a dollar amount and the percentage does not match the given split ratio. Overall, the correct answer is the only option that provides a dollar amount for the salesperson's commission and is consistent with the given split ratio.

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