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Monthly Archives: July 2017

How many people get part of a commission?

How many Realtors do you pay when you pay a real estate sales commission?

Most times two, sometimes three and many times four. How is that?

In most sales the seller pays a commission to the listing broker who splits it with the listing agent.

If the property was listed and sold by the broker himself, he can keep the whole commission. When an agent listed the property, the commission is split between broker and agent according to the broker’s policy on commissions.

When the property was listed by an agent of the broker and is sold by another agent of that broker, the commission is split three ways among the broker and his two agents.

When the property was listed by one company but the buyer comes through a different company, the commission is split between the two companies, and split again between the broker and agent in each company.

The typical commission on residential property is 6%. If two companies are involved, the commission is split, usually 50-50, with each company receiving 3% of the selling price.

What if you listed your property with a broker, e.g., Michael Dixon, at a 6% commission, and he sells the property himself? In that case he would not have to split the commission with anyone. Would he keep the whole 6% commission for himself? No.

He would take only half of the commission and let you keep the other half. Michael can afford to work for 3% of the selling price because he has very low operating costs. You would still get all of the services you usually would pay 6% for.