Real estate: Who pays the commission?


It’s not that you don’t want everybody to get paid, because you want them to do a great job for you, but you have probably wondered who actually gets the commission after a house sale. A lot of people are involved in a sale, and you are just trying to get the best deal possible.

What Do the Fees Cover?

The people on both sides of the transaction generally earn their livings in the business, and they have to spend hours taking care of the tasks involved.

For instance, the sales agents won’t make much money sitting in an office waiting for people to call, so they spend their time actively pulling listings, returning calls and analyzing prices.

A good agent has put in the time to learn the neighborhoods, expected selling prices on the property for sale, and other local information like schools and crime rates.

Splitting the Commission on Properties for Sale

Other sales, like for automobiles or appliances, are usually paid to the salesperson. In a real estate transaction, agents get paid based on the contract between the seller and the listing broker. The listing broker’s compensation is always negotiable, so you may be able to get a better rate there.

In fact, the commission is normally shared among a group of people:

  • the listing agent who took the seller’s information;
  • the listing broker, for whom the listing agent works;
  • the agent who represents the buyer, unless you are trying to handle it all yourself;
  • and the broker that agent works for.

If you consider how many times someone asks about a listing, and how few of those interactions make it all the way through a closing, you can see how hard everyone has to work to try to get their share.

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