One cheque leaves. Six people take a piece.
Sellers think the commission goes to the person who showed the house. Agents know it does not. Follow the money down the waterfall below, then look at how many unpaid months of work sit behind each one of those closings.
Illustrative figures in USD. Rates, splits and who is legally allowed to pay whom vary enormously by country — Brazil, the US, the UK and most of Europe each work differently. The structure of the waterfall does not.
Nobody pays for the ninety per cent that fails
A brokerage is paid only on completion, which means every valuation that went nowhere, every viewing on a rainy Saturday and every offer that collapsed is funded out of the deals that closed. Rough shape of a working month for one agent:
Commission is not a fee for a day's work
It is the price of running a pipeline where most of the effort produces nothing. That does not make every rate reasonable — it explains why the rate is not simply "hours × wage".
Paid months after the work
An agent listing a property in March is typically paid in July or August, if it completes at all. New agents fail on cash flow long before they fail on ability.
Referrals and repeat business
Paid advertising is expensive and converts badly. Experienced agents run mostly on past clients and word of mouth, which is why they are so attentive after a sale has already closed.
What the percentage is actually buying
The visible part is the viewing. Most of the job is the six things around it that a seller only notices when they go wrong.
Pricing it correctly
A comparative analysis of what similar properties actually sold for — not what they were listed at. The gap between those two numbers is where most amateur pricing goes wrong.
Checking the paperwork before marketing
Title, registration, outstanding debts, building approvals, unpermitted extensions, service charges. Discovering an irregularity after an offer is accepted costs everyone weeks; discovering it on day one costs an afternoon.
Filtering the buyers
Establishing early who has finance arranged and who is browsing. This is the least visible and most valuable part of the job — every unqualified buyer represents a month of a seller's life.
Presentation and distribution
Photography, floor plan, listing copy, portal placement. Bad photos measurably reduce enquiries, and enquiries in the first two weeks determine the eventual price more than anything that happens later.
Negotiating without ego
The professional value is that neither party negotiates directly with someone who is emotional about the same object. An intermediary can carry an insulting offer without the deal dying on the spot.
Holding the deal together
Between agreement and completion sit the lender, the surveyor, two lawyers, a management company and often a chain of other transactions. Somebody has to phone all of them every week. That somebody is the reason the deal completes, and it is the part of the job no one ever sees.
Whose side is the agent on?
Structurally, the answer is usually "the person who signed the agreement", and the commission is nearly always funded out of the sale price. Knowing which arrangement you are in changes what you should say out loud.
The seller's agent
Engaged by the seller, paid on the sale price, and duty-bound to get the best terms for them. Anything you tell them as a buyer — your maximum, your deadline, your enthusiasm — is information they are obliged to use.
The buyer's agent
Represents the purchaser and is common in the US, growing elsewhere. Since the 2024 settlement in the US, buyers generally sign an agreement with their agent before touring homes, and how that agent is paid is negotiated openly rather than assumed.
Dual agency
One agency, sometimes one person, holding both ends. The efficiency is real and so is the conflict: nobody can negotiate hardest for two parties over the same number. Restricted or banned in several jurisdictions, and it should always be disclosed in writing.
Closing beats price
The difference to an agent between selling at 100 and at 103 is small; the difference between selling and not selling is everything. That asymmetry pushes gently but consistently towards accepting the offer on the table.
"Who pays you, and how much?"
A straightforward question with a straightforward answer, in currency. Discomfort answering it is itself informative.
Agent, broker, agency
Almost everywhere, an individual agent must operate under a licensed broker or firm that carries the legal responsibility and the insurance. Brazil has CRECI, the US has state licensing, the UK has its own regime — check the register before signing anything.
The market is the only appraiser
An overpriced property does not simply sit there. It actively damages its own value, and it does so on a schedule you can predict.
The only real attention you get
Every buyer already searching in that area and price range sees it at once. That burst does not come back, and a price correction later reaches a far smaller audience.
Days on market becomes the story
Portals show how long a listing has been up. Past a certain point, buyers stop asking "is it nice" and start asking "what's wrong with it" — and open with a lower offer for that reason alone.
The chase down
A series of small reductions almost always ends below what a correct initial price would have achieved, months later, with more viewings and more cost.
Buying the listing
The oldest practice in the trade: an agent quotes an inflated valuation to win the instruction, then spends the next three months talking the seller down. If one valuation is far above the others, that is a warning, not good news.
Get three valuations, ask for the evidence
Ask each agent for the three comparable properties they used and what those actually sold for. A valuation without comparables is a guess with a logo on it.
Why exclusivity exists
Under an open listing, any agency may sell it and only the winner is paid — so nobody invests in photography, advertising or effort. An exclusive mandate for a defined period is what buys real work, and its length is the thing to negotiate, not its existence.
The pipeline, and where deals die
A significant share of agreed sales never complete. Almost all of them fail at one of these six points, and most are visible in advance.
Offer accepted
A handshake, usually not binding until contracts exist. The clock starts here and everyone relaxes at exactly the moment they should not.
Next: paperwork
Finance confirmed
An approval in principle is not a loan. The lender's own valuation can come in below the agreed price, and then somebody has to find the difference in cash or the price is renegotiated.
Kills: ~1 in 4 failures
Title and legal checks
Ownership, liens, unpaid taxes and charges, inheritance disputes, extensions built without approval. This is the single most common cause of a deal quietly dying, and it is entirely preventable by checking before marketing.
Prevent: check on day 1
Survey or inspection
Damp, structure, roof, wiring. Rarely fatal on its own; almost always triggers a renegotiation, which is where a deal with no goodwill left in it collapses.
Effect: price renegotiation
The chain
Your buyer must sell their flat, and their buyer must sell theirs. One failure anywhere unwinds the whole line, and nobody in it has any control over the others.
Fix: almost none
Signing and registration
Contracts, funds transferred, keys handed over, and the transfer registered. Only at registration is the property genuinely the buyer's — and only then does anyone get paid.
Finally: commission released
Letting is a different company wearing the same sign
Sales and rentals share a shopfront and almost nothing else. One is lumpy and occasional; the other is small, recurring and operational — and it is why most agencies do both.
| Sales | Letting and management | |
|---|---|---|
| How it is paid | A percentage of the price, once, at completion | A finder's fee of about one month's rent, plus 6–12% of rent every month |
| Cash flow | Large, irregular, months late | Small, predictable, arriving every single month |
| What is actually sold | A transaction, and the nerve to hold it together | Not having to answer the phone when a boiler fails at 11pm |
| The recurring work | None after completion | Rent collection, arrears, repairs, inspections, deposits, renewals, notices |
| The guarantee question | Not applicable | Deposit, guarantor, or rent-guarantee insurance — this is what the tenant screening is really about |
| Why agencies value it | Higher headline earnings | It pays the rent and salaries in a year when nobody is buying |
Twelve words from the listing agreement
- Instruction / mandate
- The seller's written appointment of an agency, setting the rate, the duration and whether it is exclusive.
- Exclusive listing
- One agency has the sole right to sell for a fixed period. In exchange, they are expected to actually invest in marketing it.
- Open listing
- Several agencies may sell it; only the one who does gets paid. Cheap, and it reliably produces the least effort from everyone.
- Comparables
- Recent completed sales of similar nearby properties. The evidence behind any valuation worth trusting.
- Days on market
- How long a listing has been advertised. Public, and it turns into a negotiating weapon for buyers surprisingly quickly.
- Dual agency
- The same agency representing both sides. Efficient, conflicted, and restricted in a number of jurisdictions.
- Commission split
- How the fee is divided between the two brokerages, and then between each brokerage and its agent.
- Franchise fee
- A cut taken off the top by the brand before anything is divided locally. Typically several per cent of every deal.
- Under offer
- An offer accepted but not yet legally binding. A meaningful proportion of these never complete.
- Chain
- A sequence of dependent transactions. The single largest source of failed sales in markets where it is common.
- Due diligence
- Verifying title, debts, approvals and encumbrances before money moves. Cheaper before marketing than after an offer.
- Completion
- Funds transferred, keys handed over, transfer registered. Everything before this is intention.