New York State Real Estate Salesperson Licensing Exam

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Prepare for the New York State Real Estate Salesperson Licensing Exam with flashcards and multiple choice questions. Each question includes hints and explanations to help you succeed. Ace your exam with confidence!

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What entity determines the commission in a real estate transaction?

Real Estate Board
Principal/Client and the broker
Department of State
Market Analysis Committee

The correct answer is: Principal/Client and the broker

In a real estate transaction, the commission is determined by the principal or client in agreement with the broker. This relationship is typically established through a listing agreement, which outlines the terms of the commission. It is a private matter negotiated between the agent and the client, allowing for flexibility based on various factors such as the property's market value, the specific services being provided, and any unique circumstances of the transaction. While other entities, such as industry boards or committees, may provide guidelines, education, and standards, they do not set the actual commission amounts. The Department of State, for instance, regulates real estate practices but does not dictate commission rates. Ultimately, the negotiation and agreement between the principal and the broker is where the commission structure is defined.