Humber/Ontario Real Estate Course 4 Exam Practice

When a brokerage disburses funds from the commission trust account, what is typically the first disbursement?

1. To the brokerage's own general account

2. To any cooperating brokerage

3. To the salespersons employed by the brokerage

4. To government tax authorities

5. To the brokerage's administrative fees

6. To legal services rendered during the transaction

The correct answer is: To any cooperating brokerage

The typical first disbursement from a commission trust account is usually made to any cooperating brokerage involved in the transaction. This priority is grounded in the standard practice of ensuring that commissions are paid to all parties who have contributed to the sale, including those working at different brokerages that may have represented either the buyer or the seller. This approach fosters goodwill and encourages cooperation between different brokerages, which is essential for successful transactions in real estate. While it is important for the brokerage's own fees, salespersons’ commissions, and other expenses to be disbursed, the cooperating brokerage is generally compensated first. This reflects the collaborative nature of real estate transactions, where multiple parties contribute to the process.