Real estate commissions are a fee that is paid to a real estate broker when a property is sold or leased. The commission is usually a percentage of the sale or lease price and is split between the broker and the real estate agent who worked on the transaction. In this article, we will discuss how real estate commissions work and clear up some common misunderstandings about them.
First, it is important to understand that the broker is the person who actually gets paid the commission. The broker is a licensed professional who runs a real estate business and employs agents to work for them. When a property is sold or leased, the broker will receive a commission from the sale or lease price. The broker will then split this commission with the agent who worked on the transaction.
The seller is the person who pays the real estate commission. The commission is typically included in the sale price of the property and is paid by the seller at the closing of the sale. For example, if the commission is 6% of the sale price, and the sale price is $300,000, the commission would be $18,000. This amount would be paid by the seller at the closing of the sale.
The commission is usually split between the broker and the agent. For example, if the commission is 6% of the sale price, the broker may receive 3% and the agent may receive 3%. The exact split between the broker and the agent can vary depending on the agreement between them. The broker and the agent may also have different commission splits for different types of transactions.
It is a common misconception that the buyer pays the real estate commission. However, this is not true. The buyer does not pay the commission. The commission is paid by the seller and is included in the sale price of the property.
In conclusion, real estate commissions are a fee paid by the seller to the broker when a property is sold or leased. The broker splits the commission with the agent who worked on the transaction. The buyer does not pay the commission. Understanding how real estate commissions work can help clear up any misunderstandings and make the process of buying or selling a property a little easier.
Written by: Texas Roadrunner Realty with ChatGPT
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