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Real Estate Commission 101: How Does It Work?

During a property sale, the buyer and the seller of a property make a financial transaction in which some part of the seller’s money goes to the real estate agents that are representing both parties. This money covers the costs of their services and is called the real estate agent’s commission.



Are you a new realtor in the business? If so, before you spend thousands of bucks marketing yourself, familiarize yourself with how real estate commission works.

Who pays the commission?

All real estate transaction differ in terms of how many parties are involved and how much of the buyer’s money will be split among these entities. In most cases it’s the seller who pays the commission to the real estate agents.

When the seller is listing their property, they know that some of the amount from the sale price will be paid as commission to the real estate agents. When the buyer makes an offer after negotiations, the commission is deducted from the sale price, along with a few other closing costs and fees.

How is the commission divided?

The commission is split between the buyer’s agent and the lister’s agent. This split isn’t always equal and the amount is finalized during negotiations. If there is a brokerage firm involved, the commission is further divided between them and the real estate agents.

The amount of commission depends on the seniority, success, and experience of the real estate agent as well.



When is the commission paid?

Just because the deal has been finalized doesn’t mean the real estate agents will receive their commission immediately. The closing process, which includes the final payout, may take time, so real estate agents often have to wait for months to collect their commission.



Is there an alternative to late commission payments?

If you’re tired of waiting on your commission, you should consider realtor commission advances. This is a transaction where a real estate agent sells a portion of their pending commission at a discount to become eligible for a cash payment immediately.

A commission advance is different from a loan as a real estate agent is going through another channel to procure a payment he’s owed in the future.

Why should you opt for real estate commission advances?

Real estate advance commissions allow real estate agents to receive their commission quickly, without having to wait for months. This helps them become cost-effective, and allows them to invest in their own business.

If you’re looking for a reliable and efficient commission advance company, visit Silver Advance. This New Yorkbased company will give you an advance on your real estate commissions, without any hidden costs. Contact us today and get started on our easy application process.

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