While REALTOR® commissions can vary anywhere from 5-7% of a home’s selling price, the average commission is around 6%, and that, too, is usually negotiable.

EXAMPLE: a 6% commission on a home that sold for $200,000 means a $12,000 commission.

Commission rates work as a percentage of the sales price rather than a fixed amount, therefore the higher the selling price of a home, the higher the commission. As a result, a REALTOR® will always work hard to make sure that you get the best price possible.

Normally, the REALTOR®’s commission is divided between the listing (selling) agent and the buyer’s agent. How they divide it depends on the agreement between them.

HOW DOES IT WORK FOR A REALTOR® LISTING A PROPERTY?

  • Sales price of house: $200,000
  • Commission percentage: 6%Total commission: $12,000 (6% of $200,000)
  • Listing REALTOR® percentage: 3% (of $200,000) = $6,000
  • Buyer’s REALTOR®percentage: 3% (of $200,000) = $6,000
  • The $6,000 remaining is now split between the listing REALTOR® and the brokerage they work for:

    • These agreements can be anywhere from 50/50 to 60/40, depending upon the contract but a first year agent will usually get 60%. Let’s say it’s 50/50 in this case, which means the agent has actually earned $3000 on the whole deal.
    • To continue reading this article click What Is The Average REALTOR® Commission?

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Lee Redwood

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