How does a real estate agent typically earn their commission?

A real estate agent typically earns their commission by successfully closing a sale or lease agreement. This commission is usually a percentage of the final sale price or lease agreement value and is paid at the closing of the transaction. The expectation is that agents work diligently to find buyers and negotiate deals that benefit their clients, leading to a successful transaction which directly ties their earnings to their performance. This model incentivizes agents to secure the best possible outcomes for their clients, aligning the interests of both the agent and the client throughout the process.

In contrast, charging a fixed fee for consultations, hourly rates for viewings, or offering free market analyses do not represent the standard compensation structures for agents in the real estate industry. These methods do not align with the commission-based model that is prevalent, where agents are rewarded for the successful completion of real estate deals.