Get Real: Those real estate commissions

Posted by Beth Alois on March 5, 2014

Who pays real estate commissions and who receives them? These are questions we Realtors often hear from home owners and buyers who are about to get jump into the marketplace.

Let’s start with the sellers. When they select a real estate agent to represent them, they will have a discussion with that agent about the commission they will pay to the agent’s broker. In Pennsylvania this is a negotiable figure and is usually a percentage of the final sale price. That figure is then entered into the contract between the seller and the broker. The seller does not pay the fee until settlement, when the commission is given to the brokers involved in the deal.

The commission is then paid at settlement in two checks, with the broker for the buyer usually receiving half the amount of the commission.

For example, when The Jim DeFrank Sales Team works with a seller, the contract is between the seller(s) and Berkshire Hathaway HomeServices Fox & Roach Realtors, with the actual agent listed as the “licensee.” At settlement, the commission payment is split between Fox & Roach Realtors and the broker representing the buyer.

Each broker, the one for the seller’s agent and the one for the buyer’s agent, takes the check and divides the money based on commission agreements with the individual agent. If the agent is part of a team, the team leader has further agreements for how the money is divided.

Looking at this from the buyer’s side, there is no commission fee for the buyer; however, the buyer should keep in mind that the seller is figuring in the amount of the commission when he looks at his bottom line at settlement. The buyer’s agent is paid by his/her broker after the broker receives the check at settlement.

In the following months, we will review the services provided by the agents for the sellers and the buyers.

Here are last month’s stats for the Unionville-Chadds Ford School District area.

February 2014
Listed properties	32
Listings under contracts	17
Properties sold	11
Average sale price	$406,527
Minimum sale price	$116,500
Maximum sale price	$950,000