PSI Virginia Real Estate Practice Exam

What is the role of the broker in relation to commissions?

1. To keep all commissions for themselves

2. To distribute commissions after transactions

3. To negotiate commissions with buyers

4. To assess property values

The correct answer is: To distribute commissions after transactions

The broker plays a vital role in managing commissions related to real estate transactions, particularly in the distribution of commissions after transactions are completed. This process involves the broker collecting the full commission from the transaction and then determining how that commission will be divided among the involved parties, which may include agents, cooperating brokers, and any affiliated parties. This distribution is shaped by the agreements made prior to the transaction—such as listing agreements or buyer representation agreements—which often outline the commission structure and how fees will be shared. A broker ensures that this process is transparent and compliant with industry regulations, thereby facilitating fair compensation for all individuals involved in the transaction. The other options, while related to aspects of a broker’s duties, do not accurately capture the specific and primary responsibility regarding commissions. Keeping all commissions for themselves is not aligned with ethical standards or industry practices. Negotiating commissions with buyers is typically not a core broker responsibility, as commissions are generally negotiated between the broker and seller. Assessing property values is another distinct function that falls under appraisals, which is separate from the broker's role in commission distribution.