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 commission is calculated using this simple formula:

Where:

• Sale Price — The final selling price of the property
• Commission Rate — The agreed percentage rate for the commission

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

3. Understanding Commission Rates

Details: Commission rates typically range from 4% to 6% of the sale price but can vary based on location, property type, and market conditions. Rates are negotiable between the seller and their agent.

4. Using the Calculator

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

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 agent and buyer's agent.

Q2: Are commission rates fixed?
A: No, commission rates are negotiable and can vary based on many factors including property value and local market conditions.

Q3: How is the commission split between agents?
A: The total commission is usually split evenly between the listing and buying agents, but this can vary based on agreements.

Q4: Are there alternatives to percentage-based commissions?
A: Some brokers offer flat-fee or tiered commission structures, especially for higher-value properties.

Q5: When is the commission paid?
A: Commission is paid at closing from the sale proceeds, after all other closing costs are deducted.