For example, if an agent has worked with a seller or a buyer for months, they don’t get paid for the time spent if there is no transaction during that period. Once the transaction goes through to settlement (closes), agents receive a commission based on the home's selling price. The commission itself is negotiated — in most cases, between the seller and the agent. The seller agent will consult with the seller and they will agree upon a percentage of the final sale price. However, some discount brokerages will negotiate fewer services in exchange for lower fees. 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 6% that, if further divided, the buyer’s agent would receive 2.5% while the listing agent receives 3.5% of the commission. Even though some agents are associate brokers, or brokers in general, all commission payments are instructed to go through to the broker managing the brokerage where the agent is working. From there, the commission is then split between the agent and the broker, according to the agreement 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.
PAYING THE COMMISSION ITSELF
The overall commission is paid for at the settlement period by the seller. The fee is taken from the proceeds of the home sale or the property. However, the buyers pay the commission because they’re literally paying to purchase the house, while the sellers
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