A salesperson working for Broker A sells a $150,000 home listed with another brokerage. The listing commission is 6.5 percent of the selling price. Of this amount, 5 percent is payable to the referral network that referred the buyer, 35 percent goes to the listing broker, and 60 percent belongs to the cooperating broker. Broker A and the salesperson agreed that she would receive 55 percent of any commission that she generated for their office. For this transaction, she is entitled to receive:

She is entitled to $3,217.5

Explanation:

First the amount the brokers and sales person are interested in is 6.5% of the selling price ($150,000). so calculating 6.5% of the selling price;

6.5% = 6.5/100 = 0.065

∴ 6.5% of $150,000 = 0.065 × 150,000 = $9,750

Next, we are interested in the cooperating broker (Broker A), who the sales person works for. Note that a cooperating broker is the broker who facilitates a real estate transaction, along with a listing broker who listed the property, and in this case the listing broker is Broker A, who the sales person works for.

We are told that the cooperating broker takes 60% of the listing commission ($9,750);

Therefore, 60% of $9,750 = 0.6 × 9,750 = $5,850

Next, we are also told that out of this amount, the sales person is responsible for 55% of the listing commission entering the cooperate broker's office;

Therefore, 55% of $5,850 = 0.55 × 5,850 = $3,217.5

Therefore the sales person is entitled to $3,217.5

The answer is "A) lower up-front costs".

Upfront costs refers to the costs that you pay out of pocket when your offer on a home has been acknowledged. Upfront costs incorporate earnest money (regularly paid once you achieve shared acknowledgment with the vender), the inspection charge (paid amid investigation), and the appraisal expense (paid after review and on or before closing).  

Upfront costs are also defined as the costs that are charged toward the start of an agreement, task or business action.