How is the brokers commission typically calculated?

• A. By applying a per-square-foot rate to the listing price
• B. By multiplying the sales price by the commission percentage
• C. By subtracting a discount from the sales price
• D. By adding a fixed amount to the listing price

Answer: (B)

Commissions are typically calculated as a percentage of the final sale price. The agreed-upon commission rate is applied to the sales price to determine the total brokerage fee, which is usually split between the listing agent and the buyer's agent and paid by the seller at closing from proceeds. This approach differs from charging a per-square-foot fee, subtracting a discount from the price, or adding a fixed amount to the listing price. For example, with a 6% rate on a $300,000 sale, the total commission would be $18,000.