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
A two-story house characterized by a balcony spanning the width of the second story. Monterey architecture was adopted from the early California Spanish period. ...
A loan used for acquiring land. Loans used to purchase unimproved land have more risk than a mortgage to purchase improved property, thus, land loans traditionally have a somewhat higher ...
A lease granted for the right to explore for and recover oil and gas on a specific parcel of property. The terms of an oil and gas lease specify the length of time of the contract, the ...
In order to define the rate of return on investment, or more commonly known as ROI we are also going to explain how it can be calculated and what to look for in the return rate. Investing ...
Economic or physical life of a fixed asset. The property is depreciated over the period benefited. ...
(1) Right to engage in and earn from a particular activity in return for services or for a particular use. (2) Reduced price used as an incentive. (3) Permission or right, granted by a ...
The value of property subject to tax. The tax equals the tax rate multiplied by the property's value. ...
A land property estate contingent upon the occurrence or lack of occurrence of a particular event whereupon it can be created, augmented, or dismantled. ...
In-ground watering system generally controlled by a digital timer that waters the grass and shrubbery of a property. ...
Have a question or comment?
We're here to help.