Most of us wonder how real estate agents make money. The general idea that we have about the earnings of a Telluride real estate agent is that it comes from the commission he gets from the sale of a Telluride Colorado real estate property. Nonetheless, home buyers normally don’t preoccupy themselves with issues that deal with the money their agents make. However, it is important that you have a general understanding about this aspect of home buying as much as the money is part of the total amount that you end up paying to buy a new house.

Generally the person selling a real estate property pays the listing broker a percentage from the selling price. The listing broker, on the other hand, share part of the commission that he gets from the sales proceed through the MLS with other participating brokers who had contribution in bringing in the buyer of a particular real estate property. The cooperating broker in most instances gets half of the money made on the property.

If there is no cooperating broker in the purchase of a certain property, then the entire commission goes to the listing broker. Hence, a real estate transaction can materialize without a cooperating agent if home buyers choose to buy a house without their own agent. This is possible in cases where the listing agent stands as the representative of both the buyer and the seller. This is also applicable in situations where the listing agent acts as facilitator for a particular real property transaction who is not under the obligation to represent either the home buyer or the seller of the real estate property.

The next layer of the commission sharing involves distributing the money made on a sale with the real estate agents and sales executives who are working with them. In cases where the agent is also at the same time the broker, the agent will get to keep all the profit earned from the sale of the real estate property.

The sharing of commission between and among the brokers and agents can be arbitrary although in most instances new real estate agents get 50% commission. Agent’s commission that is less than the norm of 50% is generally unusual in real estate industry standards. In fact, a seasoned real estate agent can earn as much as 60% to 97% as commission for the sale of a real estate property. There are also instances where the commission follows an accelerated scale and the percentage increases with the number of real estate properties that is sold through the agent. A broker and agent will work out the distribution of profit where the latter gets the entire split commission and only pays the former a fee in lieu of a share in the commission earned from the sale of the real estate property.

There are also some states where home buyers get rebates from the purchase of a real estate property. It is debited from the income of the broker. The rebate will be [credited to the buyer|given to the purchasers} at the finalizing of the purchase. It can be in the form of a gift card or any other form of financial return.

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This entry was posted on Monday, June 15th, 2009 at 1:31 pm and is filed under Real Estate Investments. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.