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 spouse's legal right, upon the death of his wife (or her husband), to a life estate in all lands she (or he) owned. ...
The legal requirement of a debtor, obligor, to pay a debt and the legal right of a creditor, obligee, to demand satisfaction of a debt or enforce payment in the event of default. ...
The smallest lot area required for building under the municipal zoning code. For example, a municipal zoning code requires all building lots to have a minimum lot area of 1/4 of an acre in ...
Investments, usually in limited partnership, that can protect of defer shelter) part of the income from current taxes. Under current law, passive leases can be applied up to passive income. ...
Generally speaking, an affidavit is a written statement or declaration, made under oath before a licensed individual, such as a notary public or even a Judge. You’ve probably heard ...
Appraisal concept stating the value a particular improvement contributes to the overall value of a property irrespective of its actual cost. ...
One to whom a gift or bequest is made. ...
Molding used in corners simulating a quarter of a circle. ...
Same as term prospectus: Document that must accompany a new issue of securities for a real estate company or partnership. It includes the same information in the registration statement, ...
Have a question or comment?
We're here to help.