California Real Estate Practice Exam

In California, the salesperson's commission is paid by the:

1. Broker

2. Buyer

3. Escrow holder

4. Seller

The correct answer is: Broker

In California, the salesperson's commission is typically paid by the broker, who acts as the intermediary between the salesperson and the clients. Brokers are responsible for overseeing transactions and play a crucial role in managing the financial aspects, including the distribution of commission payments. The commissions are usually based on the final sale price of the property, which is negotiated in the listing agreement. While buyers and sellers may be involved in negotiations regarding commissions as part of the overall transaction costs, it is the broker who actually disburses the commission to the salesperson after the transaction is completed. This ensures that the salesperson receives compensation for their services rendered in helping to facilitate the sale. In certain transactions, costs related to commission might indirectly impact buyers or sellers, but the direct payment to the salesperson comes from the broker, making it the correct choice in this context.