1. What is Realtor Commission?

Realtor commission is the fee paid to real estate agents for their services in 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 commission is calculated using this simple formula:

Where:

• Sale Price — The final selling price of the property
• Commission Rate — The agreed percentage rate (typically 5-6% in the US)

Example: For a $300,000 home sale with a 5% commission rate, the total commission would be $15,000.

3. Typical Commission Rates

Details: While commission rates are negotiable, typical rates are:

• 5-6% in the United States (often split 2.5-3% per agent)
• 1-3% in the UK (plus VAT)
• 2-3% in Australia
• 3-5% in Canada

Rates may vary based on property type, location, and market conditions.

4. Using the Calculator

Tips: Enter the sale price of the property and the commission rate percentage. The calculator will instantly compute the total commission amount.

5. Frequently Asked Questions (FAQ)

Q1: Are realtor commissions negotiable?
A: Yes, commission rates are always negotiable between the seller and the real estate agent or brokerage.

Q2: Who pays the realtor commission?
A: Typically the seller pays the commission, which is deducted from the sale proceeds at closing.

Q3: Is commission taxed?
A: Yes, commissions are considered taxable income for the real estate agents and brokerages.

Q4: What's included in the commission?
A: The commission covers marketing, showings, negotiations, paperwork, and the agent's time and expertise.

Q5: Are there flat-fee alternatives?
A: Yes, some brokerages offer flat-fee services or reduced commission models, especially for experienced sellers.