Agents receive a commission once the transaction goes through to settlement (closes) based on the selling price of the home. At that point, a commission is earned. Even though some agents are associate brokers, or brokers in general, all commission payments have traditionally gone 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
As of now, it's standard for the seller to pay the commission at the settlement from the sale proceeds of the property. This commission is typically a percentage of the sale price, agreed upon in advance between the seller and their agent. Based on what the seller has agreed and the listing brokerage finds makes financial sense, a portion of the commission is paid out to the buyers broker for their work bringing a ready willing and able buyer and once the property transaction closes. This split is determined by the seller and listing broker during listing negotiations and is part of the contractual agreement between the seller and their agent. After the managing brokerage receives its portion, it then pays the individual agents according to their internal agreements. It's important for both buyers and sellers to understand that while this is the current standard practice, the real estate industry is dynamic, and practices can vary. In some cases, different arrangements might be made for commission payments, especially in light of evolving industry regulations and market
13
Powered by FlippingBook