Commission is the fee that a realtor charges for selling a house. It can vary from agent to agent and state to state. However the typical percentage of commission that most agents take is 2-5-6%.
The variation in the percentage is because of the experience of an agent. Agents with more experience earn more than the new ones.
How Much Does a Real Estate Agent Make?
The major part of the income of a real estate agent’s income comes from the commission. This is the reason why you see most the agents fighting to get as much commission as possible. It is highly unlikely for two agents to make same commission on a house with same price.
The example I am going to give you will make it even easier to understand.
When an agent is trying to sell a house whose price is $350,000 with 5% commission on it. He will make $17,500 out of - $7000 more than the agent who works for 3% commission.
However, this whole amount does not go to his own wallet. There are different factors that determine the average realtor commission 2016:
- Commission is split between buyer’s agent and seller’s agent
- The seller’s agent’s commission is further divided between him and the company he works for. Usually the ratio is 50-50
- After all the splits and other minor taxes, the agent usually gets only 1.5% of the total commission.
