How Do Real Estate Commissions Work?

It's important to discuss and agree upon the specific terms of your agent's compensation before listing your house with any broker.

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Acc. to the 2021 Profile of Home Buyers and Sellers by the National Association of Realtors, 76% of sellers foot the bill for the agent's commission.

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Real estate agents often receive a commission in the form of a percentage of the money exchanged in the final transaction, as opposed to many other professional services

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Acc. to Ben Tapper, senior managing director for Lee & Associates in New York City, this is also true for commercial real estate

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The total real estate commission paid by the seller in residential house sales normally ranges from 5% to 6% of the sale price

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This sum is divided between the brokers who represent the buyer and seller, or the businesses for which the agents work

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Acc. to national agency Keller Williams Realty, the agent earns 64% of the fee from the sale of a home, while the market center, or local office, receives 30%.

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A Keller Williams agent would receive 1.92% of the sale price if the total commission paid on the acquisition of the home was 6%.

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Although there are many other ways a broker divides the commission between an agent and the business, 60-40 splits

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