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 usually paid by the seller.

2. How Commission is Calculated

The standard commission calculation formula is:

Where:

• \( Sale\ Price \) — Final selling price of the property
• \( Commission\ Rate \) — Agreed percentage rate (typically 5-6%)

Example: For a $300,000 home at 5% commission: $300,000 × 0.05 = $15,000 commission.

3. Typical Commission Rates

Details: Standard rates vary but often range between 5-6% in the U.S., typically split between listing and buyer's agents. Rates may be negotiable depending on market conditions.

4. Using the Calculator

Tips: Enter the sale price in dollars and commission rate as a percentage (e.g., 5.5). The calculator will compute the total commission amount.

5. Frequently Asked Questions (FAQ)

Q1: Who pays the realtor commission?
A: Typically the seller pays the full commission, which is then split between the listing and buyer's agents.

Q2: Are commission rates fixed?
A: No, commission rates are always negotiable between the seller and the real estate agent/broker.

Q3: How is the commission split?
A: The total commission is usually split 50/50 between the listing and buyer's brokerage firms, with each agent typically getting a portion of their firm's share.

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

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