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Understanding Your REALTOR’S® Commission

Louisiana REALTORS® • Jun 04, 2022

REALTORS® play a critical and helpful role in the home buying and home selling process. When you put your home on the market, you, your REALTOR®, and their broker agree to a price for their services in securing a ready, willing, and able buyer. This commission is a percentage of the final sale price of the home. While the services, resources, and expertise of a knowledgeable, professional REALTOR® are invaluable, it is also important to understand how their payment structure works. Let’s take a closer look real estate commission.


How are REALTOR® Commission Rates Set?

Local real estate markets set their own commission thresholds based on service levels, client preferences, and cost tolerance. The listing broker and their client agree on the commission rate for the sale, as well as the commission rate for the buyer’s brokerage. Commissions tend to fluctuate over time based on market trends.


Can a REALTOR’S® Commission be Negotiated?

It is important to know that the commission rate is always negotiable. There is no set minimum or maximum, and this rate can be renegotiated at any time during the transaction. Typically, a commission rate for both the selling and buying brokers is established at the beginning of an agreement. However, this can be revisited based on different circumstances and scenarios.


Are There Different Commission Models for REALTORS®?

Depending on the specifics of your transaction, along with your wants and needs, there are different service levels and expectations that can be negotiated, along with corresponding compensation structures. From a full-service model that allows for commission rate negotiation to a reduced service/discounted fee approach with more flexible offerings, there is a compensation agreement that can be determined for your needs.


REALTORS® are bound by the NAR’s Code of Ethics which always places a priority on their client’s best interests. This level of service is what separates REALTORS® from other real estate agents. Understanding how their compensation is determined, as well as your options as a seller, can make your next partnership and transaction a smooth one.

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By Louisiana REALTORS® 26 Apr, 2024
From REALTOR® Magazine by Stacey Moncrieff Don’t talk about business as usual to this group: NAR’s culture transformation commissioners and new leadership are helping to usher in big changes for the nation’s largest real estate organization. When the National Association of REALTORS® named its Culture Transformation Commission—a group of more than 70 members; state and local association staff; and NAR staff selected through a collaborative process—the aim was to identify and break down impediments to being an inclusive, welcoming and respectful organization for all. NAR’s Leadership Team announced the Commission in October 2023 as an essential step in putting the organization on a new path forward. NAR continued down that path the following month with the appointment of Interim CEO Nykia Wright and again in December with the appointment of Chief Marketing & Communications Officer Suzanne Bouhia. In February, Wright engaged Karyn Detje to lead NAR’s human resources transformation. Along with the staff changes have come shifts in NAR leadership. Kevin Sears, a broker from Springfield, Mass., stepped into the presidency in January, making a commitment to help return the organization to stable ground, get back to the business of helping members succeed, and eliminate distractions from the job. Shortly after taking office, Sears announced that two former NAR presidents, Vince Malta and Sharon Millett, would fill vacancies in the 2024 NAR Leadership Team. Malta is a broker from San Francisco and was NAR’s 2020 president. Millett, a broker from Auburn, Maine, was NAR’s 1999 president. “The real story [of NAR] is progress,” Wright said in a letter to members in February, calling out the CTC’s role. The group’s recommendations, she said, will shape the association’s progress into the future. “We’ve reached out directly, and the overwhelming majority of our members have told us they trust in what we are doing to transform the organization,” Wright says. “We are not taking their trust lightly but are working every day to earn their continued confidence.” Under the new staff and member leadership, NAR is communicating more deliberately, sharpening its focus on the core mission of serving its members, and moving toward becoming a nimble organization. Four Areas of Focus Part of that comes with the delivery of the CTC’s recommendations, some of which are expected in the fall, according to Ryan Davis, NAR’s vice president of diversity, equity and inclusion. “This is a ripe opportunity for change,” says Davis, who serves as co-lead on the project. “While some of the work will likely spill over into 2025, we expect to see formal recommendations in November [at NAR NXT(link is external), Nov. 8–10, Boston].” Under the leadership of its tri-chairs, the CTC has completed two of four phases of its work—information and data gathering and aligning on priorities. In the information-gathering phase, commissioners heard from thousands of association members and staff via interviews, focus groups, open forums and informal conversations. In the second phase, they aligned the findings into four common themes and identified opportunities for culture transformation within each theme. Theme 1: Mission and Values Opportunities: Clearly define our real estate–driven mission; appreciate and understand the work that NAR staffers, members, and state and local association staff perform; set expectations around how members and staff treat one another; and embed change throughout NAR. Theme 2: Leadership Opportunities: Set clear expectations and standards for those who lead across NAR—members, state and local association staff, and NAR staff. Review the entire leadership process—from the selection, training and evaluation of senior staff to the election, appointment and training and expectations of member leaders. Theme 3: Governance Opportunities: Rethink the association’s governance structure, its focus, and how it operates to enable members and staff to do their best work. Theme 4: Compliance Opportunities: Provide a safe space for all and promote accountability. To guide the next two phases of the work—developing implementation plans and final review, adoption and implementation—the group recently engaged McKinley Advisors, a firm with deep roots and expertise in association management and transformation. Working in parallel with the CTC, a Policies and Procedures Task Force is creating recommendations to improve NAR’s policies, procedures, trainings and systems to prevent inappropriate member behavior, encourage reporting of alleged misconduct, and promote an environment of transparency and accountability. “Culture change takes time,” says Detje, who has led staff transformations within large organizations and is co-leading the project with Davis, “but I see an incredible commitment among the members and staff to make it happen. One thing I’ve found really remarkable is that, despite having been through an incredibly challenging 18 months, people are passionate about this organization and the work they do.” The commission continues to welcome feedback from members and association staff. Want to share your ideas on transforming the culture of NAR and the REALTOR® organization? Email culture@nar.realtor .
By Louisiana REALTORS® 23 Apr, 2024
Last week, NAR President Kevin Sears checked in from the NAR Broker Summit, where he learned new tools to strengthen his business alongside several hundred fellow brokers. Next stop, Washington, DC for the REALTORS® Legislative Meetings, where we’ll show Congress our grassroots strength in action. We encourage you to watch Kevin’s video here to learn more about what NAR is advocating for this year at RLM. As always, the overarching theme is increasing access to homeownership. This video is also in the video section of our website. Stay tuned for Kevin’s next update.
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