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What is the determination of the broker's commission based on in a typical agency relationship with the client?

  1. Mechanic's Lien

  2. Encumbrance

  3. Lien

  4. Mutual Agreement

The correct answer is: Mutual Agreement

The determination of the broker's commission in a typical agency relationship is based on mutual agreement. In real estate transactions, the commission is usually negotiated and agreed upon by both the broker and the client, which establishes the terms of their working relationship. This agreement can take various forms, such as being expressed in a listing agreement or a buyer representation agreement, and outlines the percentage or fee structure the broker will receive upon the successful completion of a transaction. Other options like a mechanic's lien, encumbrance, and lien pertain to legal claims against property or obligations but do not influence the determination of a broker's commission. These terms are primarily relevant in contexts relating to property ownership and financing, rather than the contractual relationship between a real estate broker and their client.