Understanding Commissions

Traditional commissions

Traditional real estate agents are paid by commission, typically 5 percent of the sale price. This means that if you purchase a home for $400,000, the listing brokerage (representing the seller) and the selling brokerage (representing the buyer) will split $20,000.

However, if the listing brokerage finds a buyer for the property and no selling brokerage is involved, the listing brokerage would be entitled to the entire $20,000,or 5% commission (this is often referred to as double-ending).