Splitting gross commision on a property

A broker splits a 4.5% gross commision on a property 50/50 with another broker.  If his share is $18,000 what is the price of the property?

  1.  $400,000
  2.  $650,000
  3.  $700,000
  4.  $800,000

The answer is D.

This is obviously a problem involving real estate math. You’ll need to use some algebra here.

This is what the math will look like:

It’s always easiest to think of the problem in words and then write it out in the actual algebra.  Basically, $18000 is ½ of the 4.5% commission, which is 4.5% of the selling price.  The selling price is what we want to find out, so that will be our variable X.

Here’s what the math will look like:

18,000 = .045(.5)(X)

So, X = 18,000/(.045)(.5), which means X is 18,000/(.0225) = 800,000.

Thus, the selling price of the home must have been $800,000