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
Some states make the legal assumption, based on title theory, that the mortgagee is a partial owner of the real estate securing the mortgage and remains as is until the debt is fully paid. ...
To default on a loan means to intentionally or unintentionally miss several consecutive monthly payments over the course of a few weeks or months. Most borrowers learn the definition of ...
(1) Occupancy rate at which rental income of a property pays for operating expenses and debt service, leaving no residual cash flow. (2) The level of sales of a real estate business where ...
One of series of parallel beams directly supporting a floor or a roof. Joists can be made out of wood, steel or steel reinforced concrete. Joists are in turn supported by other beams or ...
Physical record card where the date of the last assessment valuation and its results, as well as a property description are kept. ...
Type of investment company that invests money in mortgages and various types of investment in real estate, in order to earn profits for shareholders. Shareholders receive income from the ...
Wall having an air space between the two sides. A hollow wall is often covered with wallboard that is nailed to the wall studs providing an air space between the two sides. ...
Mortgage for an extended time period (e.g., 25 years) Type of real estate investment trust (REIT) that gives long-term mortgages to real estate developers and contractors on new or ...
Individual who by his expertise, education, and experience prepares syndication reports. ...
Have a question or comment?
We're here to help.