What is typically included in a commission structure for a real estate agent?

In a commission structure for a real estate agent, it is common for their compensation to be based on a percentage of the property's sale price. This percentage typically ranges from 5% to 6%, which is calculated from the final sale price of the property. The rationale behind this method is that it aligns the interests of the agent with those of the seller, incentivizing the agent to negotiate the highest possible sale price, as this directly affects their earnings.

Using a percentage of the sale price ensures that agents are motivated to successfully close deals, as their compensation increases with the sale price. This model is standard in most residential real estate transactions, making it the primary way agents earn income for their services.

Other payment structures like flat fees or bonuses for expedited closing may exist, but they are less common compared to the percentage-based approach, which remains the most widely accepted standard within the industry.