What role does a real estate commission typically come into play?

The real estate commission represents compensation for the services rendered by the broker. This amount is typically agreed upon in the listing agreement between the seller and the broker or in a buyer's agency agreement. It is a way for brokers to be compensated for their expertise in facilitating the sale or purchase of a property, including tasks such as marketing the property, negotiating deals, and managing transactions.

Typically, this commission is a percentage of the sale price and is only paid upon the successful closing of the transaction. This structure incentivizes brokers to work diligently on behalf of their clients to ensure a successful sale or purchase, aligning their interests with those of their clients.

The other options do not accurately reflect the nature of a real estate commission. For instance, while buyers often pay closing costs, they do not typically pay the commission directly; instead, it is usually paid from the seller's proceeds. Additionally, a commission is not a mandatory fee with a minimum payment requirement dictated by law, nor is it a fixed amount set by law; rather, it is negotiated between the broker and their client.