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Commission Basics

In the following list, we try to answer every question you've ever had about commissions but were too embarrassed to ask:

  • Who pays the commission? Usually sellers pay the commission, although in rare cases, buyers pay their agent directly. After all, sellers get money when property sells.
  • Are commissions set by law? There's no such thing as a legal minimum commission or a mandatory percentage. Commissions vary from one area to the next. The price and type of property being sold also affect the percentage. Commissions on houses, for example, usually range from 4 to 7 percent of the sale price, and commissions on vacant land can go as high as 10 percent.
  • Are commissions negotiable? Yes. In fact, most listing contracts contain language similar to the following notice "The amount or rate of real estate commissions is not fixed by law. They are set by each Broker individually and may be negotiable between Seller and Broker."