Humber/Ontario Real Estate Course 3 Exam Practice

If a brokerage needs to disburse from its commission trust account, where should the first disbursement typically go?

1. To an external auditing agency

2. To its general account

3. To the buyer's solicitor

4. To the cooperating brokerage involved

5. To the involved salespersons at the brokerage

6. To the selling agent

The correct answer is: To the cooperating brokerage involved

The first disbursement from a brokerage’s commission trust account typically goes to the cooperating brokerage involved in a transaction. This is because the commission earned from a real estate transaction is usually split between the listing brokerage and the cooperating brokerage that represented the buyer. When a transaction closes, the funds in the commission trust account are intended to ensure that both parties to the agreement are compensated according to the terms established in the listing agreement and any cooperating agreements that may exist. Hence, this initial disbursement honors the contractual agreements made regarding the sharing of commission. In real estate transactions, timely payment to the cooperating brokerage is essential for maintaining professional relationships and ensuring that all parties feel incentivized and satisfied with the transaction’s outcome.