Real Estate Commission Calculator
Estimate the total commission and net proceeds for your property sale.
Understanding Real Estate Commissions
Selling a home is one of the most significant financial transactions you will ever undertake. One of the largest costs associated with selling is the real estate agent commission. Typically, this fee is paid by the seller and is calculated as a percentage of the final sale price.
How Real Estate Commission is Calculated
The standard real estate commission usually ranges between 5% and 6% of the home's final sale price. This total percentage is often split between two parties:
- The Listing Agent: The professional who markets the home, hosts open houses, and negotiates with buyers.
- The Buyer's Agent: The professional who brings the qualified buyer to the transaction.
For example, on a $500,000 home sale with a 6% commission, the total fee would be $30,000. If the split is 50/50, each agent's brokerage would receive $15,000.
Factors That Influence Commission Rates
While 6% is often cited as the "standard," commission rates are legally negotiable. Factors that can impact the rate include:
- Local Market Trends: In a "hot" seller's market, some agents may lower their rates to secure listings.
- Service Level: Discount brokerages may offer lower rates but fewer services (like professional photography or staging).
- Dual Agency: If one agent represents both the buyer and the seller, they may offer a "dual agency" discount.
Who Pays the Commission?
In most traditional real estate models, the seller pays the entire commission out of the proceeds of the sale. However, the cost is often "baked into" the listing price, meaning the buyer is indirectly contributing to the fee. Recent legal changes and industry shifts are beginning to allow more flexibility in how these fees are structured and disclosed.