1. What is Real Estate Commission?

Real estate commission is the fee paid to real estate agents or brokers for their services in facilitating a property sale. 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 standard commission calculation formula is:

Where:

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

Example: For a $300,000 home with 6% commission rate, the total commission would be $18,000.

3. Importance of Commission Calculation

Details: Understanding commission calculations helps both sellers (to estimate net proceeds) and agents (to project earnings). It's also important for budgeting and negotiating commission rates.

4. Using the Calculator

Tips: Enter the property sale price in dollars and the commission rate as a percentage (without the % sign). Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is the typical real estate commission rate?
A: In the US, rates typically range from 5-6% of the sale price, though this can vary by region and is always negotiable.

Q2: Who pays the real estate commission?
A: Typically the seller pays the commission, which is then split between the listing and buyer's agents.

Q3: Is commission always a percentage of sale price?
A: While percentage-based is most common, some agents may charge flat fees or hybrid models, especially for high-value properties.

Q4: Can commission rates be negotiated?
A: Yes, commission rates are always negotiable between the seller and their listing agent.

Q5: How is the commission split between agents?
A: The total commission is typically split 50/50 between listing and buyer's brokerages, then each brokerage splits their portion with their agent according to their agreement.