How are commissions typically determined in real estate transactions?

How are commissions typically determined in real estate transactions?

• A. Set by the state.
• B. By agreement between client and broker, commonly a percentage of the sale price, shared between listing and selling brokers unless otherwise stated.
• C. Fixed by the MLS.
• D. Based on days on market.

Answer: (B)

Commissions are determined by a negotiated agreement between the client and the broker. In practice, this is usually a percentage of the sale price, and that amount is split between the listing broker and the buyer’s broker unless the parties agree to a different arrangement. The listing agreement or representation agreement lays out this commission, and it’s paid at closing from the seller’s proceeds. This isn’t set by state law, isn’t fixed by the MLS, and isn’t based on how long the property was on the market.

Commissions are determined by a negotiated agreement between the client and the broker. In practice, this is usually a percentage of the sale price, and that amount is split between the listing broker and the buyer’s broker unless the parties agree to a different arrangement. The listing agreement or representation agreement lays out this commission, and it’s paid at closing from the seller’s proceeds. This isn’t set by state law, isn’t fixed by the MLS, and isn’t based on how long the property was on the market.