1. What is Real Estate Commission?

Real estate commission is the fee paid to agents for facilitating a property sale. In Texas, the total commission is typically split between the buyer's and seller's agents (usually 50/50).

2. How Commission is Calculated

The commission calculation is straightforward:

Where:

• Sale Price — The final selling price of the property
• Commission Rate — The agreed percentage (typically 5-6% in Texas)

Example: For a $300,000 home at 5.64% commission, total commission would be $16,920, with $8,460 going to each agent.

3. Typical Texas Commission Rates

Details: While commission rates are negotiable, the standard total commission in Texas is typically 5.64%, split as 2.82% for the listing agent and 2.82% for the buyer's agent.

4. Using the Calculator

Tips: Enter the sale price in USD and the commission rate as a percentage. The calculator will show both the total commission and each agent's share (assuming 50/50 split).

5. Frequently Asked Questions (FAQ)

Q1: Are commission rates fixed in Texas?
A: No, commission rates are always negotiable between the seller and their agent.

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

Q3: Is 5.64% the standard commission rate?
A: While common, rates can vary from 4% to 6% depending on the property and agreement.

Q4: How is commission split between brokers and agents?
A: The agent's share is typically split further with their brokerage (often 70/30 for new agents).

Q5: Are commissions taxed differently?
A: Commissions are treated as ordinary income and subject to self-employment taxes.