How are commissions typically determined in Hawaii real estate transactions?

In Hawaii real estate transactions, commissions are typically negotiated between the principal (the client) and the agent (the real estate professional). This flexibility allows both parties to discuss and agree on a commission rate that reflects the value of the services being provided and the specifics of the transaction, such as the property's value and the market conditions.

This practice aligns with general real estate principles across many states, where commissions are not mandated by law but are rather the result of negotiation. As a result, agents often have the discretion to tailor their commission structures to better meet the needs of their clients and to stay competitive within the market environment.

The other options reflect misunderstandings of the commission structure in real estate. Commissions are not determined by a fixed schedule from the Hawaii Real Estate Commission, as this agency does not set mandatory commission rates. They are also not deducted from earnest money deposits, as earnest money serves a different purpose in the transaction. Additionally, sharing commissions with unlicensed individuals is generally prohibited to ensure that real estate professionals are properly compensated for their work while adhering to legal and ethical standards.