How Does the Broker Get Paid When Selling a Home?

In real estate sales, the issue of the broker's commission invariably arises, and for sellers, the matter of who pays the broker her commission can be confusing. A broker's commission is earned when a sale is made, and she's usually paid at the closing or during formal property transfer.

Sales Commission

  1. Real estate brokers are paid a commission only when they sell a property. Property sellers and their real estate brokers almost always have a formal sales or listing contract between them. Real estate listing agreements lay out what property sellers will pay their brokers when a sale is made. Real estate broker commissions typically are paid out either as a flat fee or a percentage.

Real Estate Closings

  1. Once a real estate broker sells a property, his commission will become a part of the seller's closing costs. A real estate broker's commission is but one of several costs to the property seller to be paid at closing. The broker's commission is often the largest cost to the seller when his property finally sells. In real estate sales, a closing agent, such as an attorney or title company, will handle paying out various commissions.

Commission Payments

  1. A real estate broker often must split her commission with a buyer's broker. At the closing or formal transfer of property, a number of checks will be issued, usually by a closing agent. Real estate broker commissions are paid by the seller at the closing from the purchase money paid by the buyer to the seller. Real estate brokers are responsible for paying any real estate salespersons involved in a successful sale.

Commission Splits

  1. In California and other states, real estate agents operate under their brokers' licenses. Once a real estate broker receives his commission from a seller, he then splits it with the selling agent. For example, a broker earning a full 6 percent commission on a $100,000 property would earn $6,000. A broker paying his agent a 50/50 commission split would owe the agent $3,000 on a $6,000 commission.