How are commissions determined?
The commission percentage is agreed upon by the seller and real estate agent during the listing process and written into the listing agreement. It is important to understand how this money is distributed. Typically, the total commission you pay as a seller will be divided between the broker listing the property and the broker representing the buyer. Each of the two brokers’ commissions will then be divided between the broker/owner of the agency and the real estate agent who worked directly with the client, minus any fees (franchise fees, etc.). So the agent who lists your home or brings in the buyer may receive less than a quarter of the total commission amount you pay. Your commission is compensation for the time and services of the listing agent and buyer’s agents, their brokers who have agency overhead, the advertising of your home, any brochures and marketing materials, the sign that was placed in front of your property, the exposure on the multiple listing services, and any other
