A real estate listing agent’s fees are a percentage of their broker’s fee. This is usually around 60 percent of the broker’s total commission (the broker gets the remaining 40 percent). If there is no buyer’s agent the broker gets both sides of the commission. This can be up to 6 percent of the sales price, depending on the commission negotiated with the seller. If there is a sale’s agent, then the brokers will generally split the commission equally.
Who pays the commission?
It is usually the seller who pays as specified in the listing agreement. The money comes out of the sale’s proceeds. Sometimes the buyer and seller can agree to split the commission costs which will be stipulated in the purchase and sale agreement and shown on the settlement sheet.
Real estate commissions are often shared among many people. In a typical real estate transaction, the commission might be split four ways, among them:
- Listing agent – the agent who took the listing from a seller
- Listing broker – the broker for whom the listing agent works
- Buyer’s agent – the agent who represents the buyer
- Buyer’s agent’s broker – the broker for whom the buyer’s agent works
In the above case if the sales price was $2,000,000 the broker’s 6 percent commission would amount to $120,000. In this instance, with the 4 way split would look like this:
- Listing agent – $36,000
- Listing broker – $24,000
- Buyer’s agent – $36,000
- Buyer’s agent’s broker – $24,000