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
The definition of adjoining properties describes two or more real estate properties, lots, or parcels that shared a boundary. A property that shares a common border with another is ...
Same as term resale proceeds: Net amount received when property is sold. It equals the selling price less outstanding mortgage balance less all costs incurred in connection with the sale. ...
Post-like components of wood that comprise a building frame. For example, a building code in a locality might require that studs measuring two-up-six be used for the exterior part of the ...
The prepared form used to specify the terms of the listing contract. Usually a listing form consists of blanks the real estate agent fills in to provide the necessary information needed to ...
Interest computations based only on the original principal. For example, the simple interest on a $100,000, 8% loan is $8,000. It is compared with compound interest which is applied to the ...
The result of an act or a fact. ...
The reason a property appraisal is being made. The purpose of the appraisal is the first step in the appraisal process. The purpose of the appraisal should answer several questions: ...
Method of construction where vertical siding is attached to a horizontal framing structure. Often found in the design of agricultural buildings. ...
Measure of central tendency that is a measure of the center of the data; also called an average. Mean and standard deviation are the two most widely used statistical measures that summarize ...
Have a question or comment?
We're here to help.