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Supplemental Materials |
| Prorations - Area and Cube Math - Commissions
- Real Estate Taxes Legal Descriptions - Table of Measures and Equivalents If you right click a link, you can open that link in a new window. |
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Commission Calculation - Commissions are determined by AGREEMENT BETWEEN OWNER AND BROKER, normally as a percentage of the sales price. As with most real estate math problems, there are three variables associated with commission calculations. If any two of the variables are known, it is possible to solve the third. Problems of this nature may be expressed visually in triangular form.
THE TRIANGLULAR APPROACH VARIABLES are as follows:
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1. Result ÷ Base = Rate 2. Result ÷ Rate = Base 3. Base X Rate = Result |
In using the triangular approach for commission problems, substitute as follows:
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1. Amnt/Com. = Price X Rate/Com. 2. Price = Amnt/Com. ÷ Rate/Com. 3. Rate/Com. = Amnt/Com. ÷ Price. |
PROBLEMS
1. You sell a house for $35,000.00 at 6% commission to your broker. Your share is 50% of the commission. What is your share?
2. A home owner tells you that another agent offered to list his house for $86,000.00 and charge $4,300.00 commission. What rate of commission did the other agent negotiate with the seller?
3. A client wishes to list his house with you at a price that will net him $46,000.00 after the reduction of the 7% commission rate that you negotiated. What sales price do you need to list the home for?
NOTE: This is a typical problem faced frequently when listing properties. To solve, subtract the commission rate from 100%. This results in the percentage of the total price represented by the price of the commission, then substitute as follows.
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Note: 100% is ONE or a Whole, if you subtract the rate of commission from 100% you will end up with a number that is less that ONE. In the problem above, when you take 7% from 100% the NET is .93 and that is the number you divide into the sales price. (46000÷.93)=49462.37 |
Prorations - Area and Cube Math - Commissions
- Real Estate Taxes
Legal Descriptions - Table
of Measures and Equivalents
If you right click a link, you can open that link in a new window.
Send comments or questions to burroughs@burroughsco.com .
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