Sales Commission
Definition of "Sales commission"
Broadly speaking, a commission is a remuneration a person receives after acting on someone else’s behalf.
In the real estate world, you’ll usually hear the term “sales commission”, which is the remuneration a real estate broker and/or agent earns in regards for his/her service representing the home seller (or the home buyer) in a house buying/selling transaction.
Well… most of the times, at least.
Sorry if you’re looking for easy answers; the real estate market is complex - that’s why an agent expertise is something you should not turn your back to.
Sometimes agents do earn money regardless of a house being sold: Buyer’s agents, for instance, might earn a real estate sales commission even if the prospective home buyer doesn’t end up buying a house. Think about it: the buyer’s agent drove the client around showing houses on the weekend, shared his/her educated knowledge regarding the real estate market… that comes at a cost and it wouldn’t be right if the agent gets nothing out of it should the client decide it’s not the right time to buy a house.
And there are some times when the agent gets no real estate commission at all! Yup; even if the house is sold! If an agent entered an Open Listing or an Exclusive Agency Listing but did not manage to bring the final offer to the table, then the real estate commission will go to the agent who brought it or to the homeowner.
The standard real estate sales commission is 5% to 6% of the final sales price and the listing agent splits it evenly with the buyer’s agent.
Real Estate Tips:
Check our Glossary Terms for more real estate lingo!
And find an agent to help you with the complex task of buying or selling a house!
Popular Real Estate Terms
Financial intermediaries who invest in deeds of trust and mortgages, and hold them in their own portfolio. Large financial firm that uses depositors' money to lend to borrowers. ...
Bond whose interest is free of federal, state, or local tax in the state of the issuer. It is typically a municipal bond of estate or county agency. For example, a New York City resident ...
Legal order for a person to present at a deposition or trial documents in his possession, such as related to a real estate transaction. ...
Note having more than one maker, if one or more of the makers default on the note, all makers are sued jointly, rather than just one or all, to make restitution ...
All of the conditions of the purchase and sale agreement have been fulfilled. The escrow agent prepares a written summary of the funds received in escrow, and the moneys paid out. The agent ...
A column designed to support a concentrated load. A pier column is made out of steel, steel reinforced concrete or wood. A structure extending out into the water supported by numerous ...
Extent to which soil has cavities or pores, thereby allowing water to pass through. soil productivity;Ability of the soil to accomplish the desired objective such as its capacity for ...
Compared to; relative to; against. ...
While trying to determine your net income, you might come across the term revenue, sales, or gross income. So what does revenue mean? Through revenue, we understand the income generated ...
Have a question or comment?
We're here to help.