The fee paid to a real estate brokerage for services, typically a percentage of the sale price.
Why Commission matters on the exam
This term belongs to Real Estate Math. The questions below are real items from Freehold's bank that use it - each one cites its source.
Exam questions using Commission
Every Freehold question shows why the right answer is right — and cites its source.
Who bears ultimate responsibility for supervising the real estate activities of a brokerage's affiliated licensees?
Each licensee individually
The office administrative staff
The designated or managing broker
The state real estate commission
Show answer & explanation
The designated or managing broker — License law holds the designated or managing broker ultimately responsible for supervising affiliated licensees' real estate activities, including advertising, contracts, and trust-fund handling within the brokerage.
Source: PSI National Real Estate Exam Content Outline — Broker Supplement
In real estate practice, 'commingling' refers to which of the following?
Mixing client trust funds with the broker's personal or operating funds
Using client trust funds to pay personal expenses
Splitting a commission between two cooperating brokers
Depositing two clients' earnest money into the same trust account
Show answer & explanation
Mixing client trust funds with the broker's personal or operating funds — Commingling is the mixing of client trust funds with the broker's own operating or personal funds; it is prohibited even without misuse because it jeopardizes the safety of client money.
Source: PSI National Real Estate Exam Content Outline — Broker Supplement
After closing, a broker intentionally leaves her earned commission in the trust account for several months and periodically withdraws small amounts for personal use as needed. This practice constitutes:
Only commingling, because the commission was rightfully earned
Both commingling and conversion
Only conversion, because commingling requires client funds only
A prudent cash management strategy permitted by most states
Show answer & explanation
Both commingling and conversion — Leaving earned funds mixed in the trust account is commingling, and withdrawing amounts for personal use from that mixed account also constitutes conversion of what remains client trust money.
Source: PSI National Real Estate Exam Content Outline — Broker Supplement
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