Question

Ullung Her monthly 14. LOS Havel signed a listing agreement with a real estate agent. The commission rate is 1 on the first $200,000 of the selling price, and 2.5% on the remainder a. What commission will Havel pay if he sells his home for $289,000? b. What is the average commission rate on the seltag price?

Answer 1

1. In the given case, for the commission upto 200,000 , 4% commission has to be paid while on any amount above it 2.5% need to be paid.

Commission	Commission rate	Amount of commission
For first 200,000	4%	8000
Balance 89,000	2.5%	2225
$ 289,000		$ 10,225

2. Average rate of commission = Commission/Sales amount = 10,225/289,000 = 3.538 %