Soldier to Soldier Hawaii

Where does your Real Estate commissions actually Go

Real estate commissions are typically split among various parties involved in the transaction. Here’s a general breakdown:

  1. Listing Agent’s Brokerage: The real estate agent who lists the home for sale is referred to as the listing agent. A portion of the commission goes to their brokerage, the company they’re affiliated with.
  2. Listing Agent: After the brokerage takes its share, the listing agent gets their part of the commission. How much the agent gets depends on their agreement with the brokerage.
  3. Buyer’s Agent’s Brokerage: Another portion of the commission is allocated to the brokerage of the buyer’s agent. This is the company that represents the person buying the home.
  4. Buyer’s Agent: Finally, the buyer’s agent gets a share of the commission after their brokerage takes a cut. Again, the amount they get depends on their agreement with the brokerage.

In general, the commission is typically 5-6% of the home’s selling price, and it’s usually split equally between the buyer’s and seller’s agents. But these percentages can vary based on the local market, the specific agreement between the seller and their agent, and other factors.

In addition to this, agents may have to pay for certain business expenses out of their portion, such as marketing materials, insurance, licensing fees, continuing education, and taxes.

Remember that all of these splits are typically determined by contracts agreed upon well before the sale occurs. It’s also worth noting that in some models, like discount brokerages or for-sale-by-owner (FSBO), the commission structure can look quite different

Celester Thomas

Company Blog – Soldier to Soldier Hawaii Realty