1. What is Real Estate Commission?

Real estate commission is the fee paid to agents for their services in facilitating a property sale. In California, this is typically a percentage of the final sale price, negotiated between the seller and the listing agent.

2. How Commission is Calculated

The standard commission calculation formula is:

Where:

• Sale Price — Final selling price of the property
• Commission Rate — Percentage agreed between seller and agent (typically 5-6% in California)

Note: The total commission is often split between listing and buying agents.

3. California Commission Rates

Details: While commission rates are negotiable, the typical range in California is 5-6% of the sale price. Rates may vary based on property type, location, and market conditions.

4. Using This Calculator

Instructions: Enter the property sale price in USD and the agreed commission rate (percentage). The calculator will compute the total commission amount.

5. Frequently Asked Questions (FAQ)

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

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 6% standard for all transactions?
A: While 6% was once common, rates now often range between 4.5-6% depending on the market and services provided.

Q4: How is the commission split between agents?
A: The total commission is typically split 50/50 between listing and buyer's agents, but this can vary.

Q5: Are commissions taxable?
A: Yes, real estate commissions are considered taxable income for the agents/brokers who receive them.