1. What is Real Estate Commission?

Real estate commission is the fee paid to agents for facilitating a property transaction. It's typically a percentage of the sale price and is split between the buyer's and seller's agents.

2. How Commission is Calculated

The commission is calculated using:

Where:

• \( Price \) — Sale price of the property in USD
• \( Buyer Agent \% \) — Percentage for buyer's agent
• \( Seller Agent \% \) — Percentage for seller's agent

Example: For a $500,000 home with 2.5% to buyer's agent and 2.5% to seller's agent, total commission would be $25,000.

3. Typical Commission Rates

Details: In the U.S., total commission typically ranges from 5-6% of the sale price, usually split evenly between buyer and seller agents. Rates can vary by location and market conditions.

4. Using the Calculator

Tips: Enter the property price in USD, then enter the commission percentages for both buyer's and seller's agents. Percentages should be entered as numbers (e.g., 2.5 for 2.5%).

5. Frequently Asked Questions (FAQ)

Q1: Are commissions negotiable?
A: Yes, commission rates are always negotiable between the seller and their listing agent.

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

Q3: Are commissions taxed?
A: Yes, commissions are considered taxable income for the agents and brokerages.

Q4: What's the average commission split between agents?
A: The total commission is typically split 50/50 between buyer's and seller's agents, though this can vary.

Q5: Do commissions vary by property type?
A: Yes, commercial properties often have different commission structures than residential properties.