How are commissions typically calculated in Alabama real estate transactions?

In Alabama real estate transactions, commissions are typically calculated as a percentage of the sale price of the property. This method is common in the industry because it aligns the interests of the real estate agent with those of the seller; the higher the sale price, the more the agent earns. This commission structure incentivizes agents to work diligently to achieve the best possible sale price for their clients.

Other methods such as a flat fee, based on the number of properties sold, or a monthly retainer fee are less common in real estate and may not provide the same level of alignment between agent and client interests. A flat fee does not account for the variability in property values, and using sales numbers as a basis can discourage agents from fully committing to each transaction. Monthly retainers are atypical because they could lead to situations where agents might not prioritize closing deals for clients. The percentage-based commission remains the most popular and effective model for encouraging high performance in real estate sales.