Humber/Ontario Real Estate Course 4 Exam Practice

What is considered when calculating remuneration in a buyer representation agreement with differing commission rates?

1. The higher commission rate serves as the dominant rate

2. Seller's agreed-upon rate overrides buyer's framework

3. Agreement terms dictate whether buyer's or seller's rate applies

4. The combined rates of buyer and seller pay overlap costs

5. The property price divides equally into separate remunerations

6. The lower rate becomes the standard commission value

The correct answer is: Agreement terms dictate whether buyer's or seller's rate applies

The selection of an answer highlights the crucial understanding of how commission rates are structured within a buyer representation agreement. The terms of the agreement play a pivotal role in defining which commission rate—whether the buyer's or the seller's—will apply. In a scenario where differing commission rates are established, it is essential to refer to the specific terms outlined in the buyer representation agreement to determine which rate will prevail. This agreement is a legal document that stipulates the conditions under which representation occurs, including how remuneration is calculated. The agreement may specify conditions or frameworks that dictate the applicable commission, thus making the agreement's terms the determining factor. This reflects a fundamental principle in real estate transactions: the agreements made between parties hold significant weight in the execution of the transaction, including financial aspects such as commission rates. Understanding the details of the agreement helps ensure that all parties are clear on their obligations and entitlements regarding commissions.