What is an essential function of a real estate broker regarding commissions?

A fundamental role of a real estate broker is to earn commissions for their services, which are typically structured as a percentage of the property's sale price. This practice aligns with standard industry norms where brokers invest time, resources, and expertise in marketing properties and negotiating deals. The commission structure incentivizes brokers to maximize the sale price, as their earnings are directly tied to the value of the transaction.

This percentage-based earning model allows for flexibility, as it can vary depending on market conditions, property types, and the agreements established with sellers. Since many brokers work on a commission basis, understanding this aspect is crucial for clients when entering into contracts with brokers as it can affect their financial outcomes during a sale or purchase.

While there might be other compensation structures, the commission-based model is the most prevalent and is designed to ensure that brokers are motivated to achieve favorable results for their clients.