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
Lessors of real estate play a crucial role in the leasing process. They enable property owners to boost their assets and profits while providing tenants access to dwelling spaces and ...
Older property is bought usually by a governmental agency to be modernized and improved. In many cases, the deteriorating property is torn down and a new structure built. An example is ...
Cement or mortar with a high moisture content developing it into a slurry solution allowing the ability to be poured or pumped into crevices, fissures, and masonry cracks and joints. ...
Circumstance where no people or contents occupy or are kept in a building for at least 60 consecutive days. The same stipulations apply to property coverages as found in unoccupancy. ...
Modeled after the English Georgian style, this architecture is a perfectly scaled grand symmetrical structure which is extremely formal and conventional in style. ...
The number of days that the lender guarantees the loan's rate and terms. Without a written lock-in agreement, the lender is free to change the rate and terms at the time of loan closing. A ...
Property deed in which the grantor limits the title warranty to the grantee. A grantor does not warrant a title defect to the property occurring from a happening before the time of his ...
Estimated price at which a partner in a partnership can buy out another partner. There are several methods for developing a buy-out estimate including market comparisons, appraisals, or ...
Latin: now for then. Descriptive of actions which are performed after a deadline has elapsed, but retroactively have the same effect as if they were carried out in a timely manner. For ...
Have a question or comment?
We're here to help.