How is commission typically determined in a real estate transaction?

Commission in a real estate transaction is typically determined by mutual agreement between the buyer and seller. This arrangement allows both parties to negotiate terms that reflect the services provided by the real estate agents involved, as well as the complexity and value of the transaction.

In practice, it often involves a conversation between the seller and their agent about the commission percentage based on various factors such as the property's market value, the local market conditions, and the level of service the agent will provide. While commission rates can be influenced by other factors such as state regulations or marketplace standards, the ultimate decision typically rests on the agreement reached by the parties involved.

This collaborative approach helps to establish a sense of transparency and ensures that all parties feel comfortable with the terms of the commission. It's important to note that while some brokers may have standard commission policies, the actual commission paid can vary significantly based on negotiations.