License Law
The fee paid to a real estate broker for services in a transaction, typically a percentage of the sale price.
A real estate commission is the broker's compensation for services rendered in a transaction. Commission rates are negotiable — there is no standard or fixed rate set by law or industry association. Price-fixing of commissions is a violation of federal antitrust law (the Sherman Antitrust Act). In New York, only a licensed broker may receive a commission directly; salespersons receive their share from their sponsoring broker, never directly from a client. A commission is earned when the broker produces a ready, willing, and able buyer on the seller's terms.
Exam Tip
Commission rates are ALWAYS negotiable. Stating or implying a 'standard' rate is an antitrust violation. Only brokers receive commissions — salespersons are paid through their broker.
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License Law
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