Humber/Ontario Real Estate Course 4 Exam Practice

After listing with XYZ Real Estate Limited, what is the appropriate remuneration, if any, owed to ABC Realty Inc., and why?

1. Remuneration of 3% is owed to ABC Realty Inc. for their initial involvement with the buyer.

2. Remuneration of 1% is owed to ABC Realty Inc. based on the listing agreement's terms reducing obligations by amounts paid to XYZ Real Estate Limited.

3. ABC Realty Inc. is entitled to 2% of the remuneration due to being the first to introduce the buyer.

4. No remuneration is owed to ABC Realty Inc., as the transaction was completed well after the holdover period.

5. ABC Realty Inc. should be paid 5% as they introduced the buyer initially, irrespective of the final transaction date.

6. ABC Realty Inc. is due 4% because they originally listed the property.

The correct answer is: Remuneration of 1% is owed to ABC Realty Inc. based on the listing agreement's terms reducing obligations by amounts paid to XYZ Real Estate Limited.

The correct option highlights that a remuneration of 1% is owed to ABC Realty Inc. This is based on the specific terms outlined in the listing agreement, which typically state that the commission may be adjusted depending on the payments made to the listing broker, in this case, XYZ Real Estate Limited. In many real estate transactions, agreements specify a reduction in the commission obligations based on prior engagements or agreements with other parties involved in the sale. Since ABC Realty Inc. had involvement in this transaction initially but the sale ultimately went through with XYZ Real Estate Limited, the terms of the listing agreement become crucial in determining the financial obligations. This situation illustrates that straightforward commission arrangements often have nuanced conditions based on prior agreements. Understanding the implications of these terms is essential, as they can significantly change the expected remuneration based on prior relationships and contributions in the transaction process. The other options suggest differing amounts or completions of obligations that don't align with the stipulations outlined in the listing agreement, which is an essential factor in real estate transactions.