Colorado real estate agents commissions

As you can suppose, all the other Colorado realtors wannabes have the same goal in their lives. They want to make money! Surely, you heard that some real estate agents in Colorado made a fortune selling the property. What you probably didn’t hear, or you decided to look away, is that the most of the¬†realtors in Colorado live a decent, but not a wealthy life. There are many factors influencing the earnings of realty agents. Therefore, we shall help you realize what are Colorado real estate agents commissions. Given that the commissions are the actual earnings of Colorado real estate agents. Read on and find out how, how much, and when are Colorado real estate agents commissions paid. Because realty agents don’t receive a paycheck for every their activity on the market. In fact, it is very rare when they get commissions.

How are Colorado realtors paid:

Colorado real estate agents commissions

Calculate Colorado real estate agents commissions
Colorado real estate agents commissions calculation

The first thing you should know when thinking about dealing with Colorado realty is how can you earn doing that kind of a job. Of course, you need to make the sale. It’s obvious. But I didn’t mean what you need to do, but how much do you earn from those sales. Reading this article you’ll find out:

  • What are real estate commissions- What in reality are Colorado real estate agents commissions.
  • The meaning of sharing commissions- How Colorado realtors share commissions.
  • No settlement=no payment agreement explanation- When do Colorado realty agents get paid and when they don’t.

Commissions for real estate agents in Colorado

The most common way of paying real estate agents is through the commission after the sale is made. Therefore, the realtors in Colorado are no exceptions. That commission is usually a percentage of the real estate selling price. Hence, that percentage is what real estate brokers earn. We mentioned the terms real estate agent and real estate broker on purpose. It is very important to know the difference between them:

  • What are Colorado real estate agents commissions on average
    The average amount of Colorado real estate agents commissions is 6% of the realty price

    Real estate agent is a licensed person who works for a real estate broker. The agents can’t work independently. They work under the umbrella of realty broker.

  • Realty brokers, on the other hand, are independent realty sales people who work independently, hiring agents to help them make the sales.

All the commissions, after the sale is made, are strictly paid to Colorado realty broker. After that, the broker shares that commission with the realty agents. That’s the only way how Colorado real estate agents commissions are paid.

Talking about Colorado real estate brokers commissions, they are determined prior to the sale. The actual percentage of the price that realty broker receive is specified in the listing agreement. The listing agreement is the contract between the seller and the Colorado realty broker. And the Colorado real estate agents commissions are determined between realty brokers and realty agents. Usually, the seller is the one who pays the commission, unless there’s another kind of agreement where the seller and the buyer share it.

Talking about the figures:

How are Colorado real estate agents commissions shared?

Colorado realtors sometimes share commission
Sometimes the commissions are shared between several Colorado realtors

Colorado realty market is huge. And it is constantly growing. Hence, there are a lot of real estate agents in Colorado. Having that in mind, you can realize how big chances there are that many realty agents deal with the same real estate. There are listing agents, listing brokers, buyer’s agents and buyer’s brokers. Too many people on a single property, you might think. Only, remember how great realty market in Colorado is and you’ll have no trouble understanding why.

If this is how the things work, we should discuss it more detailed, shouldn’t we? Well, the best explanation is using an example. Let’s suppose we have a home of the average value in Colorado of 400.000$. All the possible participants are included in the trade (listing agent, listing broker, buyer’s agent and buyer’s broker)

How the participants share the total commission?

The most common way to share the commission between the Colorado realty broker and Colorado realty agent is 60/40. There are other proportions, such as 50/50, or 70/30, but they appear rarely, so we’ll use the proportion 60/40 in the example, being it’s the most common. The listing and buyer’s brokers and agents receive the equal amounts of money. It means that each part included in the trade receives one-half of the overall commission. If the home is worth 400.000$, and the commission is 6%, it means that the commission in total is 24.000$. Here’s how much of that sum receives each of the participants:

  • Listing broker: 7.200$
  • Listings agent: 4.800$
  • Buyer’s broker: 7.200$
  • Buyer’s agent: 4.800$

This is the example with all possible participants. The brokers and agents appear on each side. But there could be, and commonly are, fewer people included in the trade. Colorado realty broker could list the real estate and get in touch directly with the buyer. That way the broker would keep all 6% of the commission. Or there could be agents representing broker, where they would receive a Colorado real estate agents commission.

When are Colorado real estate agents commissions not paid?

No settlement=no payment. This rule appears in the most of the real estate trades. As we said, the commissions are actually paid when there is a sale made. If there’s no sale, what possibly could the realtors in Colorado be paid for? Still, there are some cases when Colorado realty agents get paid even if the final agreement is not made. Here are some examples when that might occur:

  • If a broker finds the buyer for the price seller set at the beginning, and the seller refuses to sell. In that case, the realty broker receives the agreed commission.
  • The seller’s spouse, as one of real estate’s owners, refuses to agree to a sale. That’s when the seller who made the deal with the broker must pay the commission.
  • After the trade is agreed, the seller insists on some new terms, not previously mentioned in the agreement. If the buyer doesn’t agree to them and gives up the purchase, the seller still must pay the commission to the broker who found the buyer.
  • If there’s a mutual agreement between the seller and the buyer to cancel the transaction, the broker still must be paid a commission.

There are other examples. We mentioned just some appearing commonly on the realty market of Colorado. Besides this, we must say something about some other ways of how Colorado realty agents are paid. For instance, some Colorado realty broker companies offer combined payment. Salary plus commission. It means that the realty agent is paid a regular salary for everyday work and given a commission if he/she makes the sale.

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