Ajax Reality lists a property for a seller at a commission rate of 8%. The multiple listing service provides that a listing brokerage will split commissions at a 50-50 rate. Baron Realty, a cooperating brokerage, finds a buyer for the property, at a price of $300,000. How much will the seller owe Ajax Reality at closing?
A. $0
B. $12,000
C. $18,000
D. $24,000
Answer: D. $24,000
Under the terms of listing agreement, the seller will pay the listing firm (Ajax) 8% of the sales price ($300,000 x .08 = $24,000). The seller is not a party to the MLS commission split agreement. It's up to Ajax to share half of the money with Baron Reality in fulfillment of the commission split agreement, the seller owes Ajax the full commission
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(a) underlying (b) option contract (c) documentation (d) reclassification adjustment
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a. true b. false