What is the definition of "commission" in real estate?

The correct answer is that "commission" refers to the fee paid to real estate agents for their services. In the context of real estate transactions, the commission is typically a percentage of the sale price of the property that is agreed upon in advance by the parties involved. This fee is compensated to real estate professionals for their role in facilitating the sale, which includes marketing the property, negotiating offers, and guiding clients through the various stages of the transaction.

Understanding this definition is crucial for both agents and clients, as it outlines the compensation structure within real estate. This fee reflects the agent’s expertise, time, and resources invested in ensuring a successful sale, making it an essential component of real estate transactions.

The other provided options represent different aspects of real estate but do not pertain to the definition of "commission." The total value of a property is related more to market appraisal and valuation. The interest rate on a property loan pertains to financing and mortgage terms, while the amount due at closing refers to various closing costs and fees that may need to be settled at the conclusion of a real estate transaction. These distinctions highlight why the definition of commission specifically focuses on the agent's fee.