Like all Professionals in the sales-based industries, the Realtor pay structure is based largely on commissions derived from successful transactions. Here's how it works:
Agent for the Seller (or listing agent)
The sellers and their agent agree to a commission percentage, in which the agent’s payment is based on the final sale price. The amount will vary depending on thea area, agent and office policy.
Agent for the Buyer
At the close of the transaction, the seller's agent splits the predetermined commission with the buyer’s agent as compensation for delivering a buyer. This split is usually about half of the total commission paid by the seller.
For example, if a listing is listed with a 6% commission, the typical breakdown is 3% to the listing broker and 3% to the selling broker. Then that is split to each agent according to the office policy. Most brokers and agents spend a tremendous amount of money on marketing every year. It takes a lot of money to sell a home.