1. What is a Real Estate Commission?

A real estate commission is the fee paid to real estate agents or brokers for their services in facilitating a property sale. The commission is 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 calculator uses the standard commission formula:

Where:

• \( Sale\ Price \) — Final selling price of the property
• \( Commission\ Rate \) — Agreed percentage rate (typically 5-7%)

Example: For a $500,000 home with 5% commission, the total commission would be $25,000.

3. Typical Commission Rates

British Columbia (BC), Canada: Typically 5-7% on the first $100,000 and 2.5-3% on the balance, though rates are negotiable.

California, USA: Typically 5-6%, with the standard being 5% in many areas. Rates may vary by region and property type.

4. Using the Calculator

Tips: Enter the sale price in your local currency (CAD for BC, USD for California), the agreed commission rate (percentage), and select your currency. The calculator will show the total commission amount.

5. Frequently Asked Questions (FAQ)

Q1: Who pays the real estate commission?
A: Typically the seller pays the commission, which is then split between the listing and buying brokers.

Q2: Are commission rates fixed?
A: No, commission rates are always negotiable between the seller and their agent.

Q3: How is the commission split?
A: The total commission is typically split 50/50 between the listing and selling brokerages, with each brokerage then splitting their portion with their agent.

Q4: Are there additional fees?
A: There may be additional administrative or transaction fees, but these are separate from the commission.

Q5: Can I sell without paying commission?
A: Yes, through "For Sale By Owner" (FSBO), but you'll need to handle all aspects of the sale yourself.