Broker’s Commission: Getting Paid

This section covers the rules regarding how money flows in this industry. The most important thing to remember is that legally, all money belongs to the Broker, not the Sales Associate."Fixing" Commissions is Illegal - There is no such thing as a "standard" commission rate in real estate.The Rule: Commission rates are negotiable between the Broker and the Client.Price Fixing: It is illegal for brokers from different companies to get together and agree to set a standard price (e.g., "Let's all agree to charge 7%"). This violates antitrust laws. You can set your own office policy, but you cannot conspire with competitors to fix prices.The Chain of Command - As a sales associate, you legally do not exist in the contract with the buyer or seller. The listing agreement is between the Broker and the Principal. No Direct Contracts: You cannot sign a contract directly with a seller to pay you. They agree to pay your Broker.Getting Paid: Your split (e.g., 50/50 or 80/20) is determined by your employment agreement with your Broker. The Broker gets the big check at closing, and then they cut a separate check to you.Suing for Money: If a seller refuses to pay the commission after the house sells, you cannot sue the seller. Only the Broker can sue the seller. If your Broker gets paid and refuses to pay you, then you can sue your Broker—but never the public.