1. What is Real Estate Commission?

Real estate commission is the fee paid to agents 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 commission is calculated using this simple formula:

Where:

• Sale Price — The final selling price of the property
• Commission Rate — The agreed percentage rate for the agent's services

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

3. Typical Commission Rates

Details: While commission rates are negotiable, they typically range between 5-6% in the United States. This is often split 50/50 between the listing agent and buyer's agent.

4. Using the Calculator

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

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

Q3: How is the commission split?
A: The total commission is usually split between the listing broker and buyer's broker, typically 50/50.

Q4: Are there alternatives to percentage-based commissions?
A: Some agents offer flat-fee or tiered commission structures, though percentage-based remains most common.

Q5: Does a higher commission mean better service?
A: Not necessarily. The quality of service depends on the agent's skills and dedication, not their commission rate.