In consideration of the brokerage successfully finding a satisfactory buyer for the property, a broker anticipates receiving a commission for the services the brokerage has provided. Usually, the payment of a commission to the brokerage is contingent upon finding a satisfactory buyer for the real estate for sale, the successful negotiation of a purchase contract between a satisfactory buyer and seller, or the settlement of the transaction and the exchange of money between buyer and seller.
In North America commissions on real estate transactions are negotiable and have been under pressure for numerous reasons the average commission has declined during the last decade from 6% to about 5%. Real estate commission is typically paid by the seller at the closing of the transaction as detailed in the listing agreement.
A growing alternative commission structure is the fee-for-service, fixed-fee, a la carte or flat-fee structure. Real estate trends have caused the unbundeling of real estate brokerage services and according to the 2007 Swanepoel Trends Report [9] rising costs and cost-conscious consumers are now exploring new innovative business models such as a la carte, multi-level marketing, residual, auctionering and other discount or online real estate models