Real Estate Commission Calculator
Estimate the total commission and net proceeds for your property sale.
How Real Estate Commissions Are Calculated
In most real estate transactions, the commission is calculated as a percentage of the final sale price. This fee covers the services provided by both the listing agent (who represents the seller) and the buyer's agent. Typically, the seller pays this entire fee out of the proceeds of the sale.
For example, if a home sells for $500,000 with a 6% commission rate, the total fee would be $30,000. This amount is usually split equally (3% each) between the two brokerages involved.
Who Typically Pays the Commission?
Traditionally, the seller pays the real estate commission. When the house is sold, the escrow or closing attorney deducts the commission from the sale price before the seller receives their funds. However, it is important to note that commissions are always negotiable and can vary by region, firm, and the specific level of service provided.
Practical Example
Let's look at a realistic scenario for a mid-range suburban home:
- Sale Price: $400,000
- Total Commission (5%): $20,000
- Listing Agent (2.5%): $10,000
- Buyer's Agent (2.5%): $10,000
- Seller Net (before other closing costs): $380,000
Tips for Sellers
When using this calculator, remember that commission is just one of many closing costs. Sellers should also account for transfer taxes, title insurance, and potential repairs requested by the buyer. By understanding these numbers upfront, you can price your home more effectively and understand your true "walk-away" amount.