Humber/Ontario Real Estate Course 4 Exam Practice

What is the correct sequence for disbursement following the closing of a transaction, according to standard brokerage practices?

1. The co-operating brokerage, the listing brokerage, and then the employed salespersons and brokers of the listing brokerage.

2. The co-operating brokerage, employed salespersons and brokers of the listing brokerage, and then the listing brokerage.

3. The listing brokerage, the co-operating brokerage, and then the employed salespersons and brokers of the listing brokerage.

4. The listing brokerage followed by its employed salespersons and brokers; the co-operating brokerage is not paid from the commission trust account.

5. The employed salespersons and brokers of the listing brokerage first, followed by the co-operating brokerage and the listing brokerage.

6. The listing brokerage, then co-operating brokerage, without any payment to brokers or salespersons.

The correct answer is: The co-operating brokerage, employed salespersons and brokers of the listing brokerage, and then the listing brokerage.

The correct sequence for disbursement following the closing of a transaction is that the co-operating brokerage is paid first, followed by the employed salespersons and brokers of the listing brokerage, and then the listing brokerage itself. This order reflects the standard brokerage practices where the co-operating brokerage typically receives its share of the commission directly related to bringing the buyer to the transaction. Following this, the employed salespersons and brokers of the listing brokerage are compensated for their roles, which is essential to acknowledge as they often have specific agreements regarding their commission share. Finally, the remaining amount is disbursed to the listing brokerage. This sequence is designed to ensure that all parties involved in facilitating the transaction receive their appropriate compensation and reflects the priority established in most brokerage agreements. When considering why the other choices do not represent the correct sequence, they generally misplace the order or suggest practices that are not aligned with conventional industry standards. Understanding these sequences is crucial for effective handling of disbursements in real estate transactions.