How Do Real Estate Commissions Work, Exactly?

You'll learn how real estate commissions work—who pays what, how it gets split up, and why.

How do real estate commissions work, exactly?

When someone sells a home, in the Piscataway housing market or elsewhere, they'll offer a commission to the real estate agent who represents them, as well as the buyer's agent. These two parts make up the total commission that's due from the homeowner.

The listing agent has taxes and expenses that come out of their portion of the payment, and they'll also pay their broker a portion of their split.

Let's say the buyer's agent sells their client on a Hidden Oaks home for sale, they'll get a commission check at closing, too. The buyer's agent will also have to pay their broker and cover expenses and taxes on their portion.

In short, a commission usually gets chopped up four ways and is an expense incurred by the homeowner who sells the house. It's not typically incurred by buyers; they have a slew of other closing costs they have to pay when they buy a home.

If you have any other questions about how real estate commissions work or you're ready to sell your house, give me a call or send me an email and let's talk soon!