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. This is 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 (e.g., 5% or 6%)

Example: For a $300,000 home with a 6% commission rate: $300,000 × 0.06 = $18,000 total commission.

3. Typical Commission Rates

Standard Rates: While negotiable, typical commission rates range from 5% to 6% of the sale price in most markets. This is often split 50/50 between the listing agent and buyer's agent.

Factors Affecting Rates: Rates may vary based on property type, market conditions, agent experience, and services provided.

4. Using This Calculator

Instructions: Enter the sale price of the property and the commission rate percentage. The calculator will instantly compute the total commission amount.

Tip: Remember that commission rates are negotiable. Always discuss and agree on rates with your realtor before signing a listing agreement.

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 their real estate agent.

Q3: What's included in the commission?
A: The commission covers agent services including marketing, showings, negotiations, paperwork, and coordinating the closing process.

Q4: Can I avoid paying commission?
A: You can sell "For Sale By Owner" (FSBO), but you'll need to handle all aspects of the sale yourself.

Q5: How is commission paid?
A: The commission is deducted from the sale proceeds at closing and distributed according to the brokerage agreements.