California Real Estate Practice Exam

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A borrower negotiates a $4,500 loan secured by a 2nd trust deed through a broker. The loan was to be for a term of 2 years. What is the maximum commission the broker can charge for services?

$450
$225
$675
None of the above

The correct answer is: $450

In California, the maximum commission a broker can charge on a loan secured by a second trust deed is subject to specific regulations. For loans with terms of two years or less, brokers typically charge a commission that is based on a percentage of the loan amount. The standard maximum commission for a second trust deed is set at 10% of the loan amount. In this case, the loan amount is $4,500. To find the maximum commission, you would calculate 10% of $4,500: 0.10 x $4,500 = $450 This calculation aligns with the maximum allowable commission based on the loan terms outlined. Therefore, the correct answer is that the maximum commission the broker can charge for this service is $450.