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Real Estate Commission Calculator

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What is the realtor commission?How do I calculate the realtor commission?FAQs

This real estate commission calculator finds the fee collected by the sales agent. It assumes no additional payments except for the realtor fee settled by the house owner. If the system works differently in your country, please get in touch with us — we can create a version of the realtor commission calculator that will best suit your needs.

This calculator deals with sales only — if you want to find the charge for selling a rental, check out the rental commission calculator.

Besides, you may find our cap rate calculator helpful in property evaluation, so you know for certain whether or not you can support your investment decisions on the real estate market.

What is the realtor commission?

The realtor commission, also known as the real estate commission, represents the fee a real estate agent charges for their professional services in facilitating a property transaction. This commission is typically calculated as a percentage of the property's final selling price.

In most instances, the commission rates range from 4% to 6%. This fee compensates the realtor for a variety of tasks, including listing the property, marketing it, conducting viewings, negotiating on behalf of the seller, and providing guidance throughout the selling process. It's important to note that this commission is only payable upon the successful sale of the property, aligning the interests of both the seller and the realtor towards a favorable sale outcome.

How do I calculate the realtor commission?

To accurately calculate the realtor commission, follow these steps:

  1. Identify the commission rate:

    This is the percentage of the sale price that will be paid as a commission to the realtor. While this rate can vary, it typically hovers around 5%.

  2. Ascertain the selling price of the property:

    This is the final amount for which the property is sold.

  3. Apply the real estate commission calculation formula:

    The realtor's fee is computed by multiplying the selling price of the property by the commission rate and then dividing it by 100 to convert the rate into a percentage. The formula is:

    real estate commission = (selling price × rate) / 100

For example, if a property is sold for $500,000 with a commission rate of 5%, the realtor fee would be calculated as follows:

real estate commission = ($500,000 × 5) / 100 = $25,000

The realtor fee is the fee paid to the realtor for their services.

If your state or nation takes VAT (value-added tax) into account, try the real estate commission calculator with VAT calculator.

FAQs

What is the 5% real estate commission for the selling price $10,000?

The commission is $500. To arrive at this answer, it suffices to compute 5% out of $10,000:

$10,000 × 0.05 = $500

If you struggle with such calculations, use an online realtor commission calculator.

Who is responsible for paying the real estate commission in a sale?

Technically, it is the seller who pays the realtor commission. However, the money comes from the payment made by the buyer, and sellers usually factor the commission into the property's price. So, in the end, the buyer pays the real estate commission, even if indirectly.

How do I calculate the real estate commission?

You can calculate the real estate commission in three steps:

  1. Determine the commission rate.

  2. Note down the selling price.

  3. Apply the real estate commission calculation formula:

    real estate commission = (selling price × rate) / 100

Are realtor commission rates negotiable?

Yes, commission rates are often negotiable and can vary depending on factors like the property's location, market conditions, and the realtor's policies. You can also compare different real estate agents' rates and use this information in your negotiations.

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