1. What Is Realtor Commission?

Realtor commission is the fee paid to real estate agents for their services in facilitating the sale or purchase of a property. This commission is typically a percentage of the final sale price and is split between the buyer's agent and seller's agent.

2. How Is Commission Calculated?

The commission is calculated using the formula:

Where:

• \( Sale\ Price \) — Final selling price of the property (USD)
• \( Rate \) — Commission rate as percentage (typically 5-6%)

Explanation: The commission is calculated by multiplying the sale price by the agreed-upon commission rate, then converting the percentage to a dollar amount.

3. Understanding Commission Rates

Details: Commission rates typically range from 5% to 6% of the sale price, though they can be negotiated. This rate is usually split evenly between the listing agent and buyer's agent, with each receiving 2.5-3%.

4. Using the Calculator

Tips: Enter the sale price in USD and the commission rate as a percentage (e.g., 5.5 for 5.5%). The calculator will compute the total commission amount in USD.

5. Frequently Asked Questions (FAQ)

Q1: Are realtor commissions negotiable?
A: Yes, commission rates are negotiable between the seller and the real estate agent or brokerage.

Q2: Who pays the realtor commission?
A: Typically, the seller pays the commission from the proceeds of the home sale, which is then split between the listing and buyer's agents.

Q3: What is the typical commission rate?
A: The standard commission rate is usually between 5% and 6% of the home's sale price, though this can vary by location and market conditions.

Q4: Is commission included in closing costs?
A: Yes, realtor commissions are typically included as part of the seller's closing costs.

Q5: Can I avoid paying realtor commission?
A: Some alternatives include for-sale-by-owner (FSBO) or flat-fee listing services, but these come with their own challenges and responsibilities.