How are real estate commissions typically determined?

Real estate commissions are typically determined as negotiable and based on the work being done. This means that agents and their clients can discuss and agree on a commission rate that reflects the services provided, the complexity of the transaction, and the market dynamics in a specific area. This flexibility allows for tailored arrangements that can vary significantly from one transaction to another.

Negotiability is a key component of real estate commissions as agents often compete for business and may be willing to adjust their rates to win a client or secure a sale. This aspect also allows for consideration of different factors such as local market conditions, the level of service provided by the agent, and any additional work involved, like staging, advertising, or marketing efforts that may be required for a property.

As a result, the commission structure is not rigidly set by any governing body or fixed by brokerages, reinforcing the notion that customization based on agreement between the parties involved is a standard practice in real estate transactions.