how do real estate commissions work

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The seller usually pays the real estate commissionReal estate commissions are always negotiable but are often between 4% and 6%.If two agents work on a real estate transaction攐ne for the buyer and one for the seller攖he commission is usually split down the middle.The real estate brokerage takes a cut of the commission to help pay for things like advertising and office space.

People also ask


  • How are real estate agents commissions determined?

  • The contracts buyers and sellers have with their agents determine the agents’ commissions. The real estate fee is often split evenly between the buyer and seller agents, although a contract could stipulate that one agent receives more of the commission than the other.

  • How are commissions paid to brokers?

  • Commissions are always paid directly to the brokerage company. Real estate agents have written agreements with their companies that spell out how much they get paid out of the total commission. Some brokerage companies split the commission 50%/50% with their agents. Some agents receive 60% and their company gets 40%.

  • How long does a real estate agent’s commission last?

  • All of the details about a real estate agent’s commission (and any transaction fees the agent charges) should be outlined in the contract that you sign when you hire an agent. This is typically referred to as a listing agreement, and it also specifies how long the agent will represent you. (Generally, listing agreements last 90 to 120 days.)

  • How is the Commission split between the seller and the buyer?

  • The seller establishes a commission rate when he or she lists with an agent, and that commission is typically evenly split between the listing and buyer agent. The seller has a right to negotiate commission with the listing agent prior to putting a home on the market.

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