1. What is Real Estate Commission?

Real estate commission is the fee paid to agents for facilitating a property sale. It's typically a percentage of the final sale price and is usually split between the buyer's and seller's agents.

2. How Commission is Calculated

The standard commission calculation is:

Where:

• \( Sale\ Price \) — Final selling price of the property
• \( Commission\ Rate \) — Agreed percentage rate (typically 5-6%)

Example: For a $500,000 home at 5% commission, the total would be $25,000.

3. Typical Commission Rates

Global Averages:

• United States: 5-6%
• Canada: 5-7%
• UK: 1-3% + VAT
• Australia: 2-3%
• Germany: 3-7%

4. Using the Calculator

Instructions: Enter the property sale price and commission rate (default is 5%). The calculator will show the estimated total commission.

5. Frequently Asked Questions (FAQ)

Q1: Is commission negotiable?
A: Yes, commission rates are always negotiable between the seller and their agent.

Q2: Who pays the commission?
A: Typically the seller pays the full commission, which is then split between agents.

Q3: Are there flat-fee alternatives?
A: Some discount brokers offer flat-fee services instead of percentage-based commissions.

Q4: How is commission split between agents?
A: The total commission is typically split 50/50 between listing and buyer's agents.

Q5: Are commissions taxed?
A: Yes, commissions are considered taxable income for the agents/brokers.