What is Commission - How do Real Estate Agents Get Paid?

Commission is a percentage of the sale price of a property that is paid to a real estate agent as compensation for their services in representing the buyer or seller in a real estate transaction.

Real estate agents typically get paid through commission, which is split between the listing agent (the agent representing the seller) and the buyer's agent (the agent representing the buyer) when a property is sold. The commission is usually paid by the seller out of the proceeds of the sale.

The commission percentage can vary, but it is typically around 6% of the sale price of the property. The commission is usually split equally between the listing agent and the buyer's agent, but this can also be negotiated between the parties involved.

When a real estate agent represents the seller in a transaction, they are responsible for marketing the property, finding potential buyers, and negotiating offers on behalf of the seller. The listing agent will typically prepare a listing agreement with the seller that outlines the commission rate and other terms of the representation.

When a real estate agent represents the buyer in a transaction, they are responsible for helping the buyer find properties that meet their needs, providing information about the properties, and assisting with the negotiation of the purchase price and other terms of the transaction.

Once a property is sold, the commission is paid to the agents involved through their respective brokerages. The brokerages will then deduct their portion of the commission (usually a percentage of the commission) and pay the remaining amount to the agents.

In summary, commission is a percentage of the sale price of a property that is paid to real estate agents as compensation for their services in representing the buyer or seller in a real estate transaction. Real estate agents typically get paid through commission, which is split between the listing agent and the buyer's agent when a property is sold.