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
An arm’s-length transaction is a business deal, or transaction where the seller and buyer act independently of each other without influence on the other party. What sets these types ...
Incapable of performing duties because of a lack of knowledge and training. The individual may not possess the qualifications and credentials. For example, a prospective buyer of real ...
The definition of gross sales price in real estate refers to the combined cost of a property or listing before subtracting the real estate agent’s commission, sales tax and other ...
The American Society of Appraisers, also referred to as ASA, is the largest voluntary membership, a multi-discipline trade association that stands for and promotes its appraiser members. ...
Loan in which two or more lenders participate in the total financing of a single mortgage. The lenders in a piggyback loan do not necessarily have equal shares. ...
An agreement specified in the lease providing the tenant the option to renew the lease for a given time period upon the expiration of the initial lease. Most lease options include the ...
There are two definitions of annexation in real estate. The first definition of annexation in real estate deals with the expansion of cities and the accompanying zoning laws. When a city ...
The willingness of a lender to give a mortgage to a mortgagor. A mortgage commitment will give a time period the mortgage will be given and an indication of the interest rate to be charged ...
Thin layer or slate of baked clay, linoleum, or some other material that is used for covering floors, roofs, or as an ornament in a building. ...
Have a question or comment?
We're here to help.