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
Local governmental ordinance breaking down the country into districts that are restricted on how private property is to be constructed and used. It applies to the land and buildings. The ...
The meaning of the term tort outlines a wrongful act resulting in injury or damages. For example, trespassing on someone’s private property can end up destroying a part of it. ...
Where something of value is kept in a secured place. An example is important real estate document and/or money kept in a bank vault. Ceiling or roof designed as an arch. ...
An account into which payment is made for particular expenses to assure that money will be available. An example is a special account the homeowner's attorney establishes for advance ...
Roof having four triangular sides forming a point at the top of a pyramid. A pyramid roof is primarily used for steeples on top of churches or certain public buildings. ...
Governmental body that reviews property tax assessment procedures. ...
Failure or refusal to perform a specified action. The failure to fulfill contractually agreed upon terms or actions. Nonperformance creates a liability which can enable a judicial damage ...
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. ...
land that is adjacent to water such as a stream. ...
Have a question or comment?
We're here to help.