Wisconsin Real Estate Sales Practice Exam

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If a seller nets $90,000 after a 10% commission, what was the listing broker's commission?

$10,000
$100,000
$9,000
$8,000

The correct answer is: $10,000

To determine the listing broker's commission in this scenario, first, it's important to understand how the net proceeds after the commission are calculated. The seller's net amount is what remains after the broker's commission is deducted from the sale price. In this case, the seller nets $90,000 after a 10% commission has been taken out. Let’s denote the sale price of the property as "x." The broker's commission, being 10% of the sale price, is expressed as 0.10x. Thus, the net amount received by the seller can be represented as: x - 0.10x = $90,000. This simplifies to: 0.90x = $90,000. To find the sale price (x), divide both sides by 0.90: x = $90,000 / 0.90, x = $100,000. Now that we have the total sale price, we can calculate the commission. The commission is 10% of $100,000: 0.10 * $100,000 = $10,000. Therefore, the listing broker's commission was $10,000. This establishes that the initial calculation of the net proceeds directly correlates