I’m often contacted by prospective buyers and sellers who eventually ask how payment and commissions work. So I thought I’d give you the bottom line as to how real estate agents get paid.
Homeowners who list their properties are typically responsible for paying the commission to the brokers (e.g., the companies affiliated with each agent) who represent the seller and the buyer. The listing agent negotiates a commission up front, and this is included in the seller paperwork. Total commissions for both brokers range from five- to six percent, and are typically divided equally. For example, a five percent commission on a $1,000,000 condo would find the seller paying $50,000 in commissions, with the brokers each receiving $25,000. Continue Reading