Real Estate Math
A listing expires with a protection period clause. During the 90-day protection period, a buyer the agent introduced purchases the property. The commission is 5% on $310,000. How much commission is owed?
ANo commission owed
B$15,500✓ Correct
C$7,750
D$3,100
Explanation
During the protection period, if a buyer introduced by the agent purchases the property, the full listing commission is owed. Commission = $310,000 x 5% = $15,500.
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Key Terms to Know
Amortization
The gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
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