the desk of:
Sorrell Associates, LLC
24681 SR 60
Warsaw, OH 43844
Brokering Real Estate: How Commissions Are Earned
Even if they split commission from the sales of your
property, you can place a good bet that brokering real
estate is what you most need when putting up your home for
sale and finding that best buyer in town. Sure, the broker
and the agent will get what they worked for, but at the end
of the day, it will be a win-win solution to all of you.
The real estate broker gets paid and his agent. And why do
you need them? Simple. They make everything easier and
simpler for you. You tell them you want to find a buyer for
your property and they will do the rest of the works until
it is sold to another individual and you get the payment
minus the commission for your agent and broker. Even so, you
might want to know and understand where all these
commissions are going.
Here is what the commission is for:
The commission the broker and agent receive is based on the
total amount of property sale. You have to understand that a
real estate agent is working under a real estate broker.
The agent gets paid by the broker after a real estate
commission is earned from closed real estate deal. Once an
agent lists a customer's property and acquires a buyer for
it, the customer will provide commission fees to the broker,
from which a percentage will proceed to the agent. The
client then signs an agreement with their enlisted broker.
A minimum of 30% of the total earned commission from
brokering real estate is given to the agent. As an example:
If the total home sale price amounts to US$100,000, the real
estate broker splits 10% commission from it, which amounts
to US$10,000. If the broker is giving out 50% to the agent,
the latter will then receive US$5,000.
However, in other cases, the agents can receive the 100% of
the commission and just pay their broker a desk fee. This is
typically applicable to top selling real estate agents.
In conclusion, how much commission an agent can earn depends
on three things:
1. total home sale price
2. the broker's sale percentage fee
3. agreed commission fee from broker's fee between
the broker and the agent.
Others receive commissions via sliding percentage scale.
Real estate agencies that do this augment the amount of
commissions they receive by having more sales. Also,
commercial properties tend to have higher commission
percentage than residential properties. However, with the
laborious negotiations involved when brokering real estate
properties, real estate agents do not always aim for a
highest commission possible.
To other people, the commissions spent when enlisting a real
estate agent or broker may look over the top, but when they
see at the general value, it is well worth it. After all,
performing a large number of tasks such as listing and
arranging the property, arranging for advertising like open
house showing and others, getting help from contracts,
inspections, negotiations, and the closing deals are going
to take a huge chunk of time as well as effort and money.
Added to that is the effort, money, and time spent when
acquiring pertinent information about and around the
property, like the home, its community, and even the
neighborhood. The agent will also have to learn of the
values of the surrounding amenities and nearby homes. These
things are tedious enough that the seller himself might not
be able to sustain without a help gotten from brokering real