1. What is Real Estate Commission?

Real estate commission is the fee paid to agents for facilitating a property sale. In California, commissions are typically percentage-based and negotiated between the seller and listing agent before the property is marketed.

2. How Commission is Calculated

The standard commission calculation formula is:

Where:

• \( Sale\ Price \) — Final selling price of the property
• \( Commission\ Rate \) — Agreed percentage rate (typically 5-6% in California)

Note: The total commission is often split between listing and buyer's agents (typically 50/50).

3. California Commission Rates

Details: While commission rates are negotiable, California averages:

• 5-6% for residential properties
• 4-8% for commercial properties
• 10% for vacant land

Rates may vary by region (higher in competitive markets like San Francisco, lower in inland areas).

4. Using the Calculator

Tips: Enter the property sale price in USD and the agreed commission rate as a percentage (e.g., 5.5). The calculator will show the total commission amount.

5. Frequently Asked Questions (FAQ)

Q1: Are commission rates fixed in California?
A: No, rates are always negotiable between seller and agent. There are no standard or fixed rates.

Q2: Who pays the commission in California?
A: Typically the seller pays the full commission, which is then split between agents.

Q3: Can commission rates be lower than 5%?
A: Yes, especially for high-value properties or with discount brokerages. Some agents offer 4% or even lower.

Q4: Is commission taxable?
A: Yes, commissions are considered taxable income for real estate professionals.

Q5: How is commission split between agents?
A: The total commission is typically split 50/50 between listing and buyer's agents, but this can vary.