What type of arrangement does a seller receive a guaranteed amount, with the remaining balance as broker compensation?

Prepare for the Illinois Broker Reciprocity Exam. Use flashcards and multiple-choice questions complete with hints and explanations. Ace your exam!

The correct answer describes a specific arrangement commonly referred to as a net listing. In this type of agreement, the seller sets a minimum amount they want to receive from the sale of their property. Any amount over that minimum becomes the broker's commission. This arrangement incentivizes the broker to sell the property for a higher price since their compensation directly correlates with the sale price above the established minimum.

In contrast, a guaranteed sales agreement typically guarantees a seller a certain price regardless of market conditions, but that specific arrangement does not depend on what the broker earns beyond that guarantee. A sell-and-leaseback agreement is a different concept where the seller sells the asset but continues to occupy it under a lease. A commission-based listing generally refers to the standard practice where the broker earns a predetermined percentage of the sale price as a commission, without the seller receiving a guaranteed minimum first.

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