1. What is Agent Commission?

Agent commission is the fee paid to real estate professionals for their services in facilitating a property sale. It's typically a percentage of the final sale price and is split between the buyer's and seller's agents.

2. How Commission is Calculated

The calculator uses the commission formula:

Where:

• Sale Price — The final selling price of the property
• Commission Rate — The total commission percentage (typically 5-6%)
• Split Percentage — The agent's share of the commission (typically 50-70%)

Example: For a $500,000 sale with 5% commission and 60% split:
($500,000 × 5%) × 60% = $15,000 agent commission

3. Understanding Commission Splits

Details: The total commission is typically split between the listing and buying brokerages, then further split between the brokerage and individual agent. Common splits range from 50/50 to 70/30 in favor of the agent.

4. Using the Calculator

Tips: Enter the sale price in dollars, commission rate as a percentage (without % sign), and your split percentage. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is a typical commission rate?
A: Rates vary but are typically 5-6% of the sale price, though this is negotiable and may be higher for luxury properties or lower in competitive markets.

Q2: How is the commission split determined?
A: The split is agreed upon in the agent's contract with their brokerage and may vary based on experience, production volume, or brokerage model.

Q3: Are commissions taxable?
A: Yes, commissions are considered taxable income. Agents should consult a tax professional about deductions and tax planning.

Q4: Can commission rates change during a listing?
A: Commission rates are typically locked in with the listing agreement but may be renegotiated under certain circumstances with mutual agreement.

Q5: What other fees might affect net commission?
A: Agents may have transaction fees, marketing costs, franchise fees, or other expenses deducted from their commission.