A commission is a small percentage of the total price of a house which is given to the agent in exchange for his services during the purchase deal. Commissions are deducted from sales proceeds and a fixed commission percentage, which is decided during an agreement between a seller and the agent, is taken out from the net price that a buyer pays a seller for a certain piece of property.
If you have acquired the services of a real estate buyer’s agent
while buying a house, this agent would have to be paid a commission which would have been decided beforehand while signing the buyer’s agreement. The house seller typically pays the commission. These are not directly paid to the agents. Instead, all sale commissions go to a real estate broker who the agent works for. Commissions are divided by the broker and are then further paid to the agents.
The amount an agent gets depends upon his work experience. Some senior and expert agents receive 100% commission and are only required to pay a small desk fee to the broker. On the other hand, agents new to their jobs get only 30% to 40% of the total commission from the broker.