Agents receive a commission once the transaction goes through to settlement (closes) based on the selling price of the home. At that point, the commission is earned. The commission itself is negotiated — in most cases, between the seller and the agent. Typically, an agent will earn a commission of 6% from the sale price, but some brokerages have commission discounts for the sellers with whom they work. Historically, the listing agent and the buyer’s agent would split the commission, but this practice may evolve due to recent regulatory changes. Issues can arise. 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, 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. The commission is then distributed between the listing agent's brokerage and the buyer's agent's brokerage. This split is predetermined and is part of the contractual agreement between
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