![]() ![]() Typically expressed as a percentage of the gross sales price of the property, usually ranging from 6 to 10 percent, although higher and lower percentages may be negotiated. Most listing agreements now contain a disclaimer advising that commissions are separately negotiated on a case-by-case basis. Setting commission rates in advance by local real estate boards or other organizations is a violation of federal law. ![]() Commissions are negotiated independently between the parties. This is true even if the seller elects not to accept the offer and withdraws the property from the market or increases the price.Ĭommission rates. Generally the commission is fully earned if the broker produces a buyer who is ready, willing, and able to close at the terms specified in the listing agreement. In order to be entitled to a commission, the broker must have a written contract for the services and must be licensed in the state. ![]() The compensation paid to a real estate broker for services rendered in connection with a sale,exchange, or lease of property. In the case of cash value life insurance, for example, the commission may be as large as a year's premium.Ĭollins Dictionary of Economics, 4th ed. But commissions on other transactions are not reported separately. The commissions on some transactions, such as stock trades, are reported on your confirmation slip. The flat fee may have certain limits, however, such as the number of shares being traded at one time. Online brokerage firms, on the other hand, usually charge a flat fee for each transaction, regardless of the value of the trade. With traditional, full-service brokers, the charge is usually a percentage of the total cost of the trade, though some brokers may offer favorable rates to frequent traders. Securities brokers and other sales agents typically charge a commission, or sales charge, on each transaction. Copyright © 2003 by Houghton Mifflin Company. Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. ![]()
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