Who is the only party from whom a licensed broker may receive compensation or commission?

Prepare for the 75-Hour Broker Pre-License Exam. Ace this important test with our comprehensive flashcards and multiple choice questions. Gain confidence in topics such as real estate practices and laws!

In a real estate transaction, the licensed broker is primarily accountable to their sponsoring broker, which is typically the brokerage firm that employs them. According to real estate laws and regulations, the compensation or commission for the services provided is most appropriately received from this sponsoring broker. This ensures that all financial transactions are conducted under the regulatory framework that governs the real estate industry.

When a transaction takes place, the broker may have agreements with buyers and sellers, but those are typically for the purpose of representing their interests. The payment of commissions comes from the sponsoring broker, who then is responsible for distributing the appropriate amounts to the respective agents involved in the transaction. This structure helps maintain compliance with legal and ethical standards within the real estate profession.

Therefore, compensation is tied to the broker's relationship with their sponsoring broker rather than directly from clients, which is why the correct answer highlights that a licensed broker may receive compensation only from their sponsoring broker.

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy