1. What is Real Estate Commission?

Real estate commission is the fee paid to real estate agents for their services in facilitating the sale or purchase of a property. 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 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 between the listing agent (2.5-3%) and the buyer's agent (2.5-3%).

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: 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 agent.

Q3: Can commission rates vary by location?
A: Yes, commission rates can vary based on local market conditions and customs.

Q4: Is the commission rate the same for all price ranges?
A: Sometimes agents offer lower percentage rates for higher-priced properties.

Q5: Are there alternatives to percentage-based commissions?
A: Yes, some agents offer flat-fee services or hourly rates, though these are less common.