1. What is Real Estate Commission?

Real estate commission is the fee paid to real estate agents 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 commission is calculated using this simple formula:

Where:

• \( \text{Sale Price} \) — Final selling price of the property
• \( \text{Commission Rate} \) — Agreed percentage rate (typically 3.5-5% in Ontario, 5-6% in California)

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

3. Typical Commission Rates

Ontario, Canada: Typically 3.5-5% of sale price, often split 2.5% to listing agent and 2.5% to buying agent.

California, USA: Typically 5-6% of sale price, usually split equally between listing and buying agents.

Note: Rates are negotiable and can vary based on property type, market conditions, and individual agreements.

4. Using the Calculator

Steps:

1. Select your location (Ontario or California)
2. Enter the sale price of the property
3. Enter the agreed commission rate (percentage)
4. Click "Calculate" to see the commission amount

5. Frequently Asked Questions (FAQ)

Q1: Who pays the real estate commission?
A: Typically the seller pays the commission, which is deducted from the sale proceeds at closing.

Q2: Is commission negotiable?
A: Yes, commission rates are always negotiable between the seller and their listing agent.

Q3: Are there fixed-fee alternatives?
A: Some discount brokerages offer flat-fee services instead of percentage-based commissions.

Q4: Does the commission include taxes?
A: No, this calculator shows pre-tax amounts. HST (Ontario) or sales tax (California) would be additional.

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