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Real Estate Licensing RePA_Sales_S Exam - Topic 5 Question 17 Discussion

A "For Sale by Owner" property owner has offered a flat fee to any licensee who procures a buyer. The owner's terms specify that 50% of the fee is payable upon contract acceptance, with the other 50% payable upon transfer of title. A CORRECT statement about this arrangement is that it is:
A) acceptable if the fee is paid to the employing broker.
B) acceptable if the fee does not exceed the prevailing commission rate.
C) in violation of license law since all compensation must be paid at closing.
D) in violation of license law since compensation for real estate sales can come only from listed properties.

Real Estate Licensing RePA_Sales_S Exam - Topic 5 Question 17 Discussion

Actual exam question for Real Estate Licensing's RePA_Sales_S exam
Question #: 17
Topic #: 5
[All RePA_Sales_S Questions]

A "For Sale by Owner" property owner has offered a flat fee to any licensee who procures a buyer. The owner's terms specify that 50% of the fee is payable upon contract acceptance, with the other 50% payable upon transfer of title. A CORRECT statement about this arrangement is that it is:

Show Suggested Answer Hide Answer
Suggested Answer: A

Under 49 Pa. Code 35.283 (Compensation and Commission), a salesperson can only receive payment through their employing broker. This means that if the flat fee is paid to the broker (not directly to the salesperson), then the arrangement is legal.

Commission does not have to be paid at closing; payment terms can be negotiated, including split payments.

For Sale by Owner (FSBO) properties are not required to be listed with a brokerage, so compensation can still be earned if a licensee brings a buyer.

Why the other answers are incorrect:

Option B (Commission Rate Limitations): There are no ''prevailing'' commission rates since commissions are always negotiable.

Option C (Compensation Must Be at Closing): Commission can be structured differently (e.g., partial upfront payment).

Option D (Only Listed Properties Qualify for Commission): Agents can earn commission on FSBOs as long as the broker is involved.


49 Pa. Code 35.283 -- Compensation and Commission

by Olive at Jun 19, 2026, 07:39 PM

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Shad
2 hours ago
I vaguely remember something about commission rates and how they should align with market standards, which makes me think option B could be relevant.
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Miles
5 days ago
I feel like there was something about how fees can be paid to brokers, but I can't recall if it was specifically about FSBOs.
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Stefania
10 days ago
I think we had a practice question about commission payments, and it mentioned that all compensation should be at closing. So, I might lean towards option C.
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Oren
16 days ago
I remember discussing how fees can be structured, but I'm not sure if splitting the payment like this is allowed.
upvoted 0 times
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