1. What is Real Estate Commission?

Real estate commission is the fee paid to real estate agents or brokers for their services in facilitating the sale or purchase of a property. 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 U.S.)

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

3. Typical Commission Rates

Details: Commission rates vary by market and are negotiable. National averages are typically 5-6%, but can range from 4% to 7% depending on location, property type, and market conditions.

4. Using the Calculator

Tips: Enter the sale price of the property and the commission rate percentage. The calculator will instantly compute 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 deducted from the sale proceeds at closing.

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

Q3: How is the commission split between agents?
A: The total commission is typically split between the listing agent and buyer's agent, often 50/50 but can vary.

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

Q5: Are commissions taxed?
A: Yes, commissions are considered taxable income for the real estate professionals receiving them.