California Real Estate Practice Exam

If a listing agreement fails to mention a specific commission amount, what commission will be owed if most owners in the neighborhood pay a 5% commission?

1. 3%

2. 4%

3. 5%

4. 6%

The correct answer is: 5%

If a listing agreement does not specify a commission amount, the commission owed will typically follow the industry standard in the surrounding area. In this case, since most owners in the neighborhood pay a 5% commission, it is safe to assume that the commission owed would also be 5%. Options A, B, and D are incorrect because they do not align with the industry standard of 5% in this scenario. It is important for a listing agreement to clearly state the commission amount to avoid any confusion or potential disputes.