An Alternative To The Traditional Real Estate Commission Model
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by: sarawilliams
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The way that the real estate commission is figured out has remained largely unchanged for several years. It is only fairly recently when a few companies began offering an alternative to the traditional model of real estate commission. This brought about a significant step up in the industry, and was reflective of the changing times at the same time.
The determination of the real estate commission is largely dependent on the arrangement by which real estate agents take part in the entire commission. All real estate agents essentially work for a real estate broker. This broker receives all the fees that a real estate agent is paid by his or her customers. It is also the brokers job to pay agents the real estate commission and to enter an contract with the seller.
A real estate agent who is new to the business may receive only a small percentage of the real estate commission. Advertising fees and office expenses may further reduce that amount. A top selling real estate agent on the other hand may be able to keep the entire real estate commission and simply pay a brokers desk fee. There are also various other arrangements in between these two examples.
When a seller and a real estate agent signs a listing agreement, the broker is typically the only one who can market the property in question. For the work of pulling in the buyers, the property seller pays the broker a real estate commission. This amount is a pre agreed percentage of the propertys selling price, and is shared by the listing broker and the real estate agent who closed the deal.
In a sense, it can be said that it is actually the buyer who pays the real estate commission. This is because the real estate commission is typically figured in with the sales price. If the seller does not agree to pay the real estate commission, the sales price would probably be significantly lower. Because the real estate commission is already included in the selling price, buying through a broker will likely cost you more than if bought the same property directly.
Now, some companies have begun offering flat or hourly rates for their services. This is a cost effective system that may just be the model upon all real estate commission dealing will be based in the future. Articles Hourly real estate . Real estate commission discount .
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