1. What is Realtor Commission?

Realtor commission is the fee paid to real estate agents for their services in facilitating a property sale. In Texas, this is typically a percentage of the final sale price, split between the buyer's and seller's agents.

2. How Commission is Calculated in Texas

The standard calculation method in Texas:

Where:

• Sale Price — Final agreed price of the property
• Commission Rate — Percentage agreed between seller and agent (typically 5-6%)

3. Typical Commission Rates

Texas Averages:

• Standard rate: 5-6% of sale price
• Usually split 50/50 between buyer's and seller's agents
• May be negotiable, especially for higher-value properties
• New construction often has different commission structures

4. Using This Calculator

Instructions: Enter the sale price of your property and the agreed commission rate. The calculator will show both the total commission and your net proceeds after commission.

5. Commission & Mortgage Considerations

Key Points:

• Commission is typically paid from seller's proceeds at closing
• Not directly tied to mortgage calculations but affects net proceeds
• For buyers: Commission is already factored into the sale price
• Texas has no state income tax, but commission is considered taxable income for agents

Q1: Is 6% commission standard in Texas?
A: While common, rates are negotiable. Many agents now offer tiered or flat-fee options.

Q2: Who pays the realtor commission in Texas?
A: Typically the seller pays both agents' commissions from the sale proceeds.

Q3: Are there alternatives to percentage-based commission?
A: Yes, some agents offer flat fees or discounted rates, especially for high-value properties.

Q4: How does commission affect my mortgage?
A: For sellers, it reduces net proceeds. For buyers, it's already factored into the purchase price.

Q5: When is commission paid?
A: At closing, deducted from the seller's proceeds before distribution.