How do you calculate real estate commission?

Real estate commissions are usually calculated based on a percentage that’s multiplied by the contract selling price of the home. For example, if the total commission percentage in your listing agreement is 6% and the selling price of your home is $500,000, the total commission fee would be $30,000. Use our real estate commission calculator to easily compare commission costs.

Are realtor commission fees calculated based on gross or net sale proceeds?

Real estate commissions are calculated based on gross sale proceeds, not net sale proceeds. That means the total commission gets applied to the final selling price of your home, before any closing costs or other fees have been deducted.

How much do real estate agents make per home sale?

An individual real estate agent usually makes between 2–3% commission per home sale, which means you’ll pay a combined total of 4–6% total commission on the sale of your home. That translates to $10,000–$15,000 in real estate commission per agent on a $500,000 home sale. If a real estate agent represents both the buyer and the seller of the home, they’d make $20,000–$30,000 on a $500,000 home sale. According to the U.S. Bureau of Labor Statistics, the 2021 median income for a real estate agent was $48,340, and the highest 10% of agents earned more than $102,170.

What percentage do most realtors charge?

Most real estate agents charge 2.5–3% of a home's final sale price for their services. The national total average commission rate is 5.49%. In a typical home sale, both realtors' commissions (the buyer's and the seller's) are covered by the seller out of the home sale proceeds. You can save on commission fees by trying to negotiate lower rates yourself or finding your agent through a low commission real estate company .

Is a 3% commission a lot?

A 3% commission for an experienced agent used to be the standard agent’s commission. However, average commission rates are declining across the real estate industry, making it harder for traditional realtors to justify a 3% commission. You can get a highly qualified, dedicated agent for less than 3% .

Cara Haynes

Contributing Writer

Cara Haynes is a contributing writer for AnytimeEstimate.com and the director of content operations for its parent company, Clever Real Estate. She's passionate about making real estate less confusing to empower people to build household wealth. She's also worked on other home service sites, including HighSpeedInternet.com and SatelliteInternet.com. Her writing has been featured on Pluralsight.com, ManagingEditor.com, Clearlink.com, and more.

Featured Published Articles

Our real estate commission calculator helps you quickly estimate how much you'll pay in real estate commission on a $500,000 sale, and your net home sale proceeds.

Cara Haynes

Featured Published Articles

Real Estate Commission Calculator: How Much Will You Owe Your Agent?