1. What is Real Estate Commission?

Real estate commission is the fee paid to agents for facilitating a property sale. In BC (Canada) and California (USA), commissions are typically a percentage of the sale price and are negotiated between the seller and listing agent.

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 (e.g., 5% for BC or 6% for California)

Note: The total commission is often split between listing and buying agents, and their respective brokerages.

3. Typical Commission Rates

British Columbia (BC): Typically ranges from 3% to 7% on the first $100,000 and 1% to 3% on the balance, with 5% being common for residential properties.

California: Typically ranges from 5% to 6% of the sale price, with 6% being most common for residential properties.

4. Using the Calculator

Instructions: Enter the sale price of the property, the commission rate percentage, and select your region (BC or California). The calculator will show the total commission amount in the appropriate currency.

5. Frequently Asked Questions (FAQ)

Q1: Are real estate commissions negotiable?
A: Yes, commission rates are always negotiable between the seller and the listing agent.

Q2: Who pays the real estate commission?
A: Typically the seller pays the commission, which is deducted from the sale proceeds at closing.

Q3: Is GST/HST added to commissions in BC?
A: Yes, in BC you must add 5% GST to the commission amount.

Q4: Are commissions different for commercial properties?
A: Yes, commercial property commissions often follow different structures and may be higher.

Q5: How is the commission split between agents?
A: The total commission is typically split 50/50 between listing and buying agents, with each agent then splitting with their brokerage.