HOW REAL ESTATE AGENT COMMISSIONS WORK – KEVIN WARD
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Real estate commissions are 100% negotiable. The usual full service commission is 5-6%. A discount commission is 3-4.5%.
A Flat fee brokerage charges a set fee (a percentage of the sales price) instead of a commission. This is paid upfront whereas full service commissions are paid out of escrow at closing.
Commissions are typically split between the listing broker(seller’s side) and the selling broker (buyer’s side). The broker owns all commissions because he owns the listing. The broker pays the agent his cut of the commission (usually a 70-30 split between broker & agent).
When the listing broker puts a listing on the MLS and offers a cooperative offer of commission, it’s traditionally a 50-50 split between the listing side (3%) and the selling side (3%).
Only licensed agents and brokers can get paid in a transaction.
How are referral fees paid? A 30% referral fee (taken out of the listing side of the commission) goes to the referring broker.
Real estate commissions are worth it because clients are paying for the value of the service that a skilled agent delivers. When a skilled agent nets his client the most money, this more than covers his commission.
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This is a great educational video…thank you.
Hi there, I am brand spanking new to this & will start my first day at a real estate company here in Dubai, super excited & I wrote down a ton of stuff from your videos!
Hello Kevin, 70% of 15k is 10,500. So no one may think there is other fee involved. 😃 good info.
Love this!! It really helps a consumer understand!
Thank you for this breakdown I am interested in becoming a licensed Real estate agent and before I take any classes I wanted to know how I would make money and I think this gave me a General guideline.
This can be very confusing. In Oregon, you are classified and acknowledged as a “Broker” not an agent. It is very difficult and extremely hard to attain a license if you are knew to this industry. However, Oregon did away with the “agent” addressee. Same concept though, because you still come under a PB and have to maintain a Brokers’ license the first 3 years of licensure. You do work under most Brokerages first 6 Transactions, of course you are called “Broker” in the State of Oregon. But you are correct Kevin in your information. The commissions are not typically but always grounds for questions to understand what is happening.
I had a realestate guy tell me that Broker and Agent are sore of interchangeable in Washington State.
I’m in Illinois and we are called brokers. I just got my license and it is a brokers license
Great video I am in the process of getting my license next month. I used to work as a MBenz service tech and all the service engineers drove TOYOTAs lol
Yota Gang 🤙
I wish my first Real Estate Broker explained it like you did. He did not go into as much detail. This was very helpful. Thank you. – TAV ❤ 🇺🇸
Thank you for the information! I am currently studying to become a real estate agent in California and I am loving watching and learning from your videos!
How’s your experience going?
@curtiserecacho1401 I’ve failed twice now, it’s really hard for me, I thought I was doing so well, I don’t understand where I messed up and what I’m not learning right. I’ve taken a break, I’m thinking maybe I need to try again soon, but my confidence feels shot. Both times I felt I did great until I saw the results
Mr. Kevin Ward all my questions have been answered. Thank You so much!
Thank you very clear in your subject. I got a lot out of it. Thank you.
My broker is with Remax. She said 3% is her fee and wants us to tell her how much we should set the Buyer comission. Could I set the comission at 2% for another Remax agent and 3% for any other company? Our agent says we need to go with 3% for both seller and buyer agents to get the most offers.
So glad I found your Chanel. You’re extremely knowledgeable and well spoken. Definitely can trust what you say. I’m learning a lot. Thank you!!
Excellent explanation, I have been a full time real estate agent also a broker associate for the last 22 years and Im thinking on going independent.
If you have any words of advice for a beginner who is truly striving to become a real estate agent, please do share! I’d love wisdom from those who are experienced 🙂
muito boa as sua aulas caro amigo Kevin
Great content Kevin. What if I represent a buyer directly buying from a developer. Or I represent the developer. What will be the split in this situation? Still around 6% ? Would I be the only agent in the mix? Help would be appreciated.
I know This is an old video but I’m just going to say for new agents or people new to real estate the broker part might be confusing but that’s because in Illinois instead of salesperson we are called brokers but we still hang our license with a sponsoring broker. Illinois doesn’t use salesperson anymore
Awesome detailed explanations. Thanks a lot.
Thank you for the kind words! As a fellow realtor, it’s wonderful to connect with someone who appreciates a clear and concise explanation.
Studying to be a real estate agent, and this information really helped me.