discounts for sellers who run many transactions through them (such as real estate investors who sell many properties). Essentially, the listing agent and the buyer’s agent will split the commission. That can bring forth some issues. For example, sometimes the split might not be negotiated evenly. A seller could have agreed to pay a commission of 5.5% that, if further divided, the buyer’s agent would receive 2.5% while the listing agent receives 3% of the commission. Even though some agents are associate brokers, or brokers in general, from positions requiring licensing and extra training, all commission payments are instructed to go through to the broker who’s managing the brokerage where the agent is working. From there, the commission is then split to the agent and the broker according to the agreement that’s been made. The split will vary; sometimes, newer agents will earn a small portion of the commission compared to the experienced or successful agents who generally sell more expensive properties or homes.
PAYING THE COMMISSION ITSELF
The overall commission is paid for at settlement (the closing) by the seller. The fee is taken from the proceeds of the sale of the home or property. However, keep in mind that the buyer is ultimately (although indirectly) paying the commission since it is the buyer paying the seller the price of the home that the commission is taken out of. The seller and the “market” have “built-in” the commission into the price of the home. From there, the commission is then divided during the settlement process between the buyer’s agent brokerage and the listing agent’s brokerage. Afterward, the agents who made the real estate sale are further paid by their brokers.
KNOWING REAL ESTATE
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