How Do Real Estate Commissions Work?

Commissions are paid by the seller, not the buyer.

The commission amount can vary; enforcing a set amount is known as “price-fixing” and is illegal. 

A common commission rate in the Columbus area is 5–6%.

Using a 6% commission as an example, 3% is the common percentage that goes to the buyer’s agent; the remaining 3% goes to the selling agent. 

Actually, these amounts go to the agent’s broker.  If you were at a closing, you’d notice that the final commission check would not be in your agent’s name, but in their company’s name (i.e., Keller Williams).

These real estate agents will receive only a portion of that 3% amount. 

Depending on the brokerage they work for, they will get a “commission split,” which could be 50/50 %, 60/40%, 70/30%, or 80/20%, with part of this percentage going to their company the broker. 

There are some realtors who get 100% of the 3% commission. These realtors pay for all their business expenses, with significant monthly fees that go to their broker.

The Real Deal:   So…. the bottom line is- your real estate agent isn’t getting rich with all of the listed commission, and retiring to Tahiti.

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