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
"Gross Leasable Area" or GLA is more than just jargon. Understanding property value and potential income is super important, especially in commercial real estate. What does Gross Leasable ...
The company is not responsible to a third party if an account or financial instrument is dishonored by the debtor. The creditor's recourse is solely to the debtor's property. An example is ...
Period of time during which a complainant in a real estate transaction can seek a financial recovery from a licensed real estate broker or agent. The time period is determined by state ...
Mortgage for residential property. ...
Any of several types of legal joinders whereby one or more parties unites with or joins other parties in a legal action or proceeding even though the party may not be a direct part of the ...
Amount a manger of real estate receives for his efforts. For example, a manger is to receive 2% of rentals collected as compensation from the landlord to manage the property. If the ...
Demise indicates the act of “granting a lease of property” in legal terms. A demising clause refers to a particular provision of housing requirements based on family size, ages, ...
Depressed or raised framed in portion of a wall, ceiling, or door. A panel board pattern is decorative and gives the effect of a series of highlighted squares or rectangular pieces. ...
Statue designed to protect lenders if a seller secretly sells substantially all of the business property. The objective of the law is to safeguard against defrauding creditors. ...
Have a question or comment?
We're here to help.