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 usually split between the buyer's and seller's agents.

2. How Commission is Calculated

The standard commission formula is:

Where:

• Sale Price — Final selling price of the property
• Commission Rate — Agreed percentage for the agent's services

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

3. Importance of Commission Calculation

Details: Understanding commission helps both agents and clients plan finances, negotiate rates, and determine net proceeds from a sale.

4. Using the Calculator

Tips: Enter the property sale price and commission rate percentage. Both values must be positive numbers (price > $0, rate between 0-100%).

5. Frequently Asked Questions (FAQ)

Q1: What's the typical commission rate?
A: Rates vary but often range between 5-6% in the US, typically split between listing and buyer's agents.

Q2: Who pays the commission?
A: Usually the seller pays the commission from the sale proceeds, though this can be negotiated.

Q3: Are commission rates negotiable?
A: Yes, commission rates are always negotiable between the agent and client.

Q4: How is commission split between agents?
A: Typically 50/50 between listing and buyer's agents, but splits can vary based on agreements.

Q5: Are there alternatives to percentage-based commissions?
A: Some agents offer flat fees or tiered structures, especially for high-value properties.