Humber/Ontario Real Estate Course 4 Exam Practice

What does an agreed percentage of sale/rental price represent in terms of remuneration?

1. A flat fee addition for services

2. An optional component

3. Changeable upon transaction completion

4. Commission-based earnings

5. Fixed governmental rate

6. Variable per month worked

The correct answer is: Commission-based earnings

An agreed percentage of sale or rental price represents commission-based earnings. In real estate, it is standard practice for agents to earn their remuneration based on a percentage of the transaction value, which incentivizes them to maximize both the selling price of properties and the rental income generated. This commission structure aligns the interests of the agents with those of their clients, as agents are motivated to produce the best possible outcome for the transaction. The other options generally do not align with how real estate remuneration is structured. A flat fee addition for services would imply a predetermined amount not tied to performance. An optional component suggests that it's not a standard practice, while changeable upon transaction completion implies a lack of consistency in payment, which is not typical for commission agreements. A fixed governmental rate would indicate a static payment structure determined by outside factors, and variable per month worked does not directly relate to typical commission-based earnings in real estate transactions.