A real estate commission is fee that a real estate agent charges for their professional services in the home selling or home buying process, such as listing the property, marketing it, conducting viewings, negotiating on behalf of the seller, and providing guidance throughout the selling process. It’s typically calculated as a percentage of final selling price, and is split between the buyer’s agent, the seller’s agent, and their brokerages.
Notably, the commission is only paid upon the successful sale of the property, which means both the seller’s agent and buyer’s agent are motivated to close the sale.
As a real estate agent, you don’t keep the full commission from the sale. First, the seller’s and the buyer’s agents split the total commission into two parts. Then, for most real estate agents, the brokerage takes a cut. This amount can vary from 20% to 60% of the real estate commission, a percentage that is usually negotiated. In most cases, however, it’s a 50% split. As an example, a 6% would be split into four equal cuts (1.5% each), which go to each real estate agent and each brokerage.
Research. Researching your market helps you learn how to maximize your benefit. Always read verified sources such as government websites or reputable websites and articles.
Ask around. By reaching out to more than one agent, you’ll understand how different agents serve their clients, which can factor into how high their commission is. This can help you know what services you should offer to get a better commission rate.
Be clear. If a potential client doesn’t know everything you offer, they might automatically pick the agent with the lowest commission rate. It’s not always easy to talk yourself up, but you do want to make sure clients know everything you bring to the table.
Real estate commission facts:
