1. What is Real Estate Commission?

Real estate commission is the fee paid to real estate agents or brokers for their services in facilitating a property sale. This is 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 — The final selling price of the property
• Commission Rate — The agreed percentage rate (typically 5-6% in the US)

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

3. Typical Commission Rates

Details: While commission rates are negotiable, standard rates in the US typically range from 5% to 6% of the sale price. This is usually split between the listing agent (2.5-3%) and buyer's agent (2.5-3%).

4. Using the Calculator

Tips: Enter the property sale price and commission rate. The calculator will compute the total commission amount. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Who pays the real estate commission?
A: Typically the seller pays the commission, which is deducted from the sale proceeds at closing.

Q2: Are commission rates fixed?
A: No, commission rates are always negotiable between the seller and their listing agent.

Q3: Can commission rates vary by location?
A: Yes, commission rates can vary by region, market conditions, and property type.

Q4: Are there alternatives to percentage-based commissions?
A: Some agents offer flat-fee services or discounted rates, especially for high-value properties.

Q5: Is the commission taxable?
A: Yes, real estate commissions are considered taxable income for the agents and brokers.