Disclaimer: First off, their is no standard. Every broker has their own rules and payment for selling a home can be a negotiated flat fee, or a negotiated percentage of the price of the home with the latter being more common. In most cases, the home seller pays 100% of the negotiated commission fee at closing. In fact, in the home sellers eyes, their is one simple commission to worry about but in most instances, the commission is split four ways behind the scenes.

The Buyer / Seller Split: Using 6% (or $12,000) of the selling price on a $200,000 home as an example, here is a breakdown of how the commission could be split: Often the listing broker offers half of the total commission (3%) to a buyers agent. (I’ve seen 70/30, 60/40 and 50/50 splits however.) So if a commission were 6% of the sales price, the listing broker would make 3% or $6,000 and the buyers broker would make the other $6,000.

The Agent / Broker Split: The above example would be pretty easy if that was it, but their’s more… Real Estate brokers take responsibility for real estate agents transactions. Brokers have additional training and minimum mandatory time spent as an agent before they can get their brokers license. Agents are typically independent contractors and all must have their license “held” by a broker. Agents typically have to split their commission with the brokerage who’s holding their license. This split can be vary drastically and often depends on whether a monthly “desk” fee is part of the equation. Since most new agents can’t afford a desk fee, they take a less favorable commission split. The biggest split I’m aware of is 47/53 with the agent receiving the 47%. I’ve seen seasoned professional agents make up to 94% of their commission however paying a $2,000/month “desk” fee is not uncommon. To keep things simple, I’ll use a 70/30 agent to broker split on both sides of this example. Here is how the break down looks now: Both listing and buying brokers earn 3% or $6,000 each. The listing split at 70/30 would mean the agent earns $4,200 (70%) and the broker earns $1,800 (30%).