Commission (commission fee) is the amount that an intermediary or agent receives for successfully completing a transaction or achieving a result specified in the contract. Typically, the commission is a percentage of the transaction amount for fulfilling obligations, such as assistance in selling, renting real estate, concluding contracts, attracting clients, etc.
Commission types:

  • Fixed commission. In this case, the commission fee is set as a fixed amount, regardless of the transaction volume. This approach is often used in situations where the service is fairly standardized and does not depend on the transaction value, such as inspection of the property or its advertising.
  • Percentage commission. Percentage commission is the most common and is a percentage of the transaction value. For example, a realtor may receive 5% of the rental or sale value of a property. Percentage commission is often used in real estate transactions, financial products, insurance, etc.
  • Mixed commission. In this case, the commission includes both a fixed amount and a percentage of the transaction. This approach is used in cases where there is an element of uncertainty regarding the volume of the transaction. For example, an agent may receive a fixed fee for his efforts and an additional fee if the transaction reaches a certain stage.

In real estate transactions, the commission is usually paid to the realtor upon completion of the transaction and may be a percentage of the property’s value. In brokerage services, the commission depends on the size of the transaction, the type of assets, and the level of customer service. In retail and distribution, commissions may vary depending on the product mix and sales volume.