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 opening that lets the outside air come in or out of a structure. A ventilation fan lets the structure have access to outside air when the switch is in open position. ...
The term collusion may make you think about colluding from the start, and you wouldn’t be far from the truth. The definition of collusion is a secret, non-competitive, and, at times, ...
Choosing alternative real estate investment instruments having different risk-return features. Diversification can be done by regions and types of real estate. Diversification provides a ...
Usual operating service life of property for the purpose it was acquired. The useful life used for depreciation accounting does not necessarily coincide with the actual physical life or any ...
A scholar second mortgage definition would go something like: a loan with a second-priority claim against a property in the event that the borrower defaults. But that’s too stiff, ...
Compilation of all tax maps of a given tax district that are bound together and kept at the local tax office. The tax book is a public record that may be accessed by an individual for ...
I am the person. The person himself/herself. The actual person. ...
An estate which descends to heirs in perpetuum. In an estate of inheritance, the current tenant not only has the right to enjoy the property for life, buy his or her tenancy rights pass to ...
Transactions taking place between individuals who are alive rather than when one of the parties is either dead (e.g., estate) or is contemplating death. For example, a deed may transfer ...
Have a question or comment?
We're here to help.