1. What is Realtor Commission?

Realtor 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 split between the buyer's and seller's agents.

2. How Commission is Calculated

The commission calculation is straightforward:

For a $2,000,000 property sale:

• Commission Rate — Percentage agreed between seller and agent (typically 5-6%)
• Sale Price — Fixed at $2,000,000 in this calculator

3. Typical Commission Rates

Standard Rates: While negotiable, commission rates typically range from 5% to 6% of the sale price. On a $2 million property, this translates to $100,000-$120,000 in total commission.

4. Using This Calculator

Instructions: Simply enter the commission rate percentage (e.g., 5.5) and the calculator will compute the total commission on a $2 million sale.

5. Frequently Asked Questions (FAQ)

Q1: Is commission always a percentage?
A: While percentage-based is most common, some agents may charge flat fees, especially for high-value properties.

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

Q3: Are commissions negotiable?
A: Yes, commission rates are always negotiable between the seller and their listing agent.

Q4: How is the commission split?
A: The total commission is usually split 50/50 between the listing and buyer's brokerage, with each agent typically receiving a portion of their side's share.

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