While there is no real set commission percentage of the sales price of the home, some may say the average would be between three and seven percent. That percentage is always negotiable and is agreed upon between the seller and the agent when the home is listed. Please bear in mind that a lower than average commission could generate less than normal interest by other agents in showing a listed property.

Contrary to what most people believe, the listing agent* is not given a check at closing for the entire commission, as they must split it with their broker**. If an agent other than the listing agent sells the home, then the commission is split again with the selling agent and their broker.

As with most home sales, the listing agent is not usually the one who actually finds a buyer for the listed home. In those cases, the commission could be split 4 ways... for example, a $100,000.00 sales price where the listing agent agreed to list the home for 5% would yield a commission in the amount of $5000.00. Split equally four ways, the listing agent would receive a check for $1250.00. Out of this amount they must pay income taxes, licensing fees, office fees, auto expenses, required continuing education fees and the costs of advertising and showing the property.

If you do the math, a real estate agent, based on the example above, would need to sell a home every week or 52 homes per year to gross $65,000.

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*A real estate agent is someone who has had the required agent training, has passed the exam, has been licensed by the state and is required to work under a broker's license as an independent contractor, not an employee.

**A real estate broker is someone who has been a real estate agent for the amount of time required by the state, has taken the required broker training, has passed the exam, has been licensed by the state and bears all of the legal responsibilities for agents working under their broker's license.

For more information about "Agency", click on the "About Realtors" link.