1. What is a Realtor Commission?

A 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 is calculated using this simple formula:

Where:

• Sale Price — The final selling price of the property
• Commission Rate — The agreed percentage rate (typically 5-6% in the US)

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

3. Typical Commission Rates

Details: While commission rates are negotiable, standard rates in the US range from 5% to 6% of the sale price. This is typically split between the listing agent (2.5-3%) and buyer's agent (2.5-3%).

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: Is the commission rate negotiable?
A: Yes, commission rates are always negotiable between the seller and their real estate agent.

Q2: Who pays the realtor commission?
A: Typically the seller pays the full commission, which is then split between both agents.

Q3: Are there alternatives to percentage-based commissions?
A: Some brokers offer flat-fee or tiered commission structures, though percentage-based remains most common.

Q4: How is the commission split between agents?
A: The total commission is usually split evenly between listing and buyer's agents, but this can vary.

Q5: Are commissions taxed?
A: Yes, commissions are considered taxable income for the real estate agents/brokers.