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

Written by Cara HaynesSeptember 14th, 202212 minute read

Real estate commission calculator | How to save on realtor commission | How realtor commissions work | Average realtor commission rates by state | Article summary | FAQ | Tiered commission calculator

Our real estate commission calculator will help you estimate your total realtor commission fees and net profit (after closing costs and loan payoff) when selling your home, based on your target sales price.

Real estate agent commissions are usually the largest cost associated with selling a home. The national average realtor commission rate is 5.49% for home sellers — approximately $27,450 for a $500,000 home! But rates vary from 5–6% nationwide depending on factors like home value, condition, location, and more.

Use the real estate commission calculators and information in this guide to better understand and control your home selling costs so you can save money and maximize profits when you sell.

🙌 Great agents, huge savings: Match with top local agents through Clever's free service, get pre-negotiated low commission rates. Average seller savings is $9,600. View Agents.

Real estate commission calculator

⚡️ Quick tip: How to save thousands on commission fees.

Use a low commission real estate company! While there are definitely some sketchy discount realtor services out there, a growing number of tech-enabled companies are offering legit savings and value.

Our top pick is Clever Real Estate, a free service that matches you with the best local agents from name-brand brokerages like Keller Williams and Century 21 — but also pre-negotiates discounted listing fees, saving you up to 50% on your total realtor commission at closing (you can try Clever for free with no obligation here). Or check out our full guide below to learn more.

» MORE: The Best Low commission Real Estate Companies in 2022

How to calculate real estate commission

Calculate your total real estate agent commission by multiplying the desired commission rate (expressed as a percentage) with the target list price or final selling price of your home (expressed in dollars).

Always apply the real estate commission rate to the gross sales price, before you subtract other expenses like loan payoff, taxes, and closing costs.

Here’s a quick example of how to calculate total real estate agent fees using a 6% commission rate and $500,000 home sale:

  1. Determine your total commission rate. 6% total commission is typical, but the actual rate will be specified in the listing agreement you sign with your agent.
  2. Divide that total commission rate by 100 (or simply move the decimal point over two places). Using our 6% example, this would give you 0.06.
  3. Multiply the total commission rate by the final sale price. So for a $500,000 home, you'd multiply 0.06 x 500,000.
  4. Now you’ve got your total commission! You'd pay $30,000 in total commission (split by your agent and the buyer's agent) out of your sale proceeds at closing.

Here’s the same real estate commission calculation expressed as a single formula:

(6/100) * $500,000 = $30,000

  • Target sale price: Your estimated or desired final sale price for your home. Your real estate agent can prepare a comparative market analysis (CMA) to help you come up with a realistic target final selling price.
  • Total commission: The total commission percentage for both the buyer and seller’s agents who handle the sale (the seller typically covers both agent fees).
  • Listing fee: The share of the total commission that goes to the seller’s agent for marketing and selling the home.
  • Buyer’s agent fee: The share of the total commission that goes to the buyer’s agent for bringing a qualified buyer who ends up purchasing the home.
  • Estimated closing costs: A rough estimate for other transactional costs — like taxes and transfer fees — that sellers typically cover with their sale proceeds at closing.
  • Loan payoff amount: The seller’s remaining balance on their home loan, which they must pay off with sale proceeds at closing. You can usually find this information on your monthly mortgage statement. Or you can request a payoff quote from your lender.
  • Net to seller: Your estimated profit (or deficit) once all your home selling costs and outstanding debts have been deducted from your gross sale proceeds.

How do real estate agent commissions work?

In a conventional real estate deal, the seller’s agent buyer’s agent each receives a share of the total realtor commission fee after the sale closes.

  • The seller’s agent collects a listing fee for marketing and selling the home.
  • The buyer’s agent collects the buyer’s agent fee for bringing a qualified buyer to purchase the home.

The two real estate agents will usually split a full commission roughly down the middle (so if the commission is 6%, each agent gets 3%).

🔎 Example: Real estate commission calculation for a $500,000 sale

Commission fee
Rate
Cost*
Listing fee
3%
$15,000
Buyer’s agent fee
3%
$15,000
Total commission paid
6%
$30,000
*Based on a $500,000 home sale.

The actual commission split will be defined in the listing agreement the seller signs with their agent before putting their home on the market. And the commission split won’t always be 50/50.

For example, if the seller is working with a low commission real estate broker or agent, each agent might collect different commission split percentages (ex: the listing agent takes 1%, but the buyer’s agent still gets 3%). Side note: That's roughly $10,000 in savings for the seller!

🔎 Example: Low commission realtor calculation for a $500,000 sale

Commission fee
Rate
Cost
Listing fee
1%
$5,000
Buyer’s agent fee
3%
$15,000
Total commission paid
4%
$20,000
*Based on a $500,000 home sale.

Who pays the realtor commission?

The home seller typically pays the entire commission, which gets split by both agents — their listing agent and the buyer’s agent. But most sellers won’t pay these fees directly out of their own pocket.

Real estate commission fees are typically baked into the home's list price and taken out of the seller’s net proceeds at closing.

This realtor commission payment structure makes the transaction more affordable for both the seller and the buyer:

  • Buyers can cover their agent’s fee with their mortgage instead of out of pocket.
  • Assuming the seller is netting a profit on the deal, they won’t have to pay anything out of pocket.

Why does the seller pay the buyer agent commission?

Sellers typically cover the buyer’s agent commission to attract buyers and sell their home faster, for more money, and with the best possible terms. It’s considered a marketing expense that benefits the seller in the long run.

Most buyers have to cough up a ton of cash to buy a house: earnest money, down payment, inspection and appraisal fees, closing costs, and many more. For many home buyers, adding another 2.5–3% out-of-pocket fee for a real estate agent could price them out from buying a home — or at least disincentivize them in a major way.

But practically speaking, the seller isn’t really paying the commissions at all. As was already mentioned, most sellers bake the commission fee into their list price. And the money is always coming from the buyer, whether they pay cash or with a mortgage.

If the buyer is financing the purchase, the benefit is that this additional 5-6% cost gets absorbed into the loan. They still end up paying it, but it’s spread out over many years instead of getting added to the pile of upfront fees.

Why sellers should offer a competitive buyer’s agent commission rate

Buyer’s agents usually prioritize homes and showings based on their potential paycheck. By offering a competitive rate, you’re incentivizing agents to show your home to their clients.

Even in a competitive market, incentivizing buyer’s agents is crucial: you’ll get more offers from more prospective buyers faster, which increases the odds of a bidding war and a higher sale price. It will also attract more qualified offers and better terms. Nearly 90% of buyers work with an agent.[1]

If you don’t offer a competitive buyer’s agent commission, it may significantly shrink your prospective buyer pool and net you a worse outcome on your sale.

How much do real estate agents make per sale?

Most real estate agents end up with only a small fraction of the commission check they walk away with after closing. All real estate agents work under and split their commissions with a parent real estate brokerage (think RE/MAX, Century 21, and others).

How much of their commission check they have to share with their managing broker depends on the following:

  • The specific real estate broker: different brands offer different commission split structures.
  • Their status and experience level: A new agent typically has less favorable splits (some have to fork over up to 50% of their fee).

So out of a $10,000 listing fee check, a newer real estate agent could realistically end up with $5,000. And that money still has to cover additional expenses incurred throughout the entire home selling process (professional photography, advertising costs, gas, etc.), as well as recurring operational costs (licensing and MLS fees, taxes, association dues, and more).

When do real estate agents get paid their commission?

Real estate agents get paid their commission checks after a property sells. Commissions are typically deducted from the home seller’s net proceeds, when checks are being cut and dispersed by the title company or attorneys at the closing table.

It’s common for the seller’s real estate agent to collect the check for the total sales commission, then pay the buyer’s agent their portion. The title company or attorneys may also cut two separate checks for each agent.

If the seller ends up owing more at closing than they’re netting on the sale, they may have to bring cash to the closing table and pay the agents directly.

⚠️ A few exceptions: Some discount brokers, like Redfin, collect commission directly at closing and pay their agents an annual salary instead. And other discount brands — limited-service brokerages and flat-fee MLS services — charge a flat fee up front instead of at closing.

Find the average realtor commission rate by state

State
Average commission rate
Massachusetts
4.85%
California
4.91%
District of Columbia
4.96%
New York
4.97%
Alaska*
4.99%
Hawaii*
4.99%
Oregon*
4.99%
Nevada
5.02%
Maryland
5.11%
Connecticut*
5.12%
Maine*
5.12%
New Hampshire*
5.12%
Rhode Island*
5.12%
Vermont*
5.12%
New Jersey
5.13%
Virginia
5.22%
Illinois
5.24%
Washington
5.30%
Idaho*
5.36%
Montana*
5.36%
Utah*
5.36%
Wyoming*
5.36%
Florida
5.40%
Minnesota
5.41%
Arizona
5.43%
Alabama*
5.44%
Arkansas*
5.44%
Delaware*
5.44%
Kentucky*
5.44%
Louisiana*
5.44%
Mississippi*
5.44%
Tennessee*
5.44%
West Virginia*
5.44%
Colorado
5.52%
Pennsylvania
5.53%
New Mexico*
5.59%
Oklahoma*
5.59%
Texas
5.59%
North Carolina
5.60%
South Carolina
5.63%
Michigan
5.65%
Indiana*
5.66%
Iowa*
5.66%
Kansas*
5.66%
Nebraska*
5.66%
North Dakota*
5.66%
South Dakota*
5.66%
Wisconsin
5.67%
Missouri
5.72%
Georgia
5.76%
Ohio
5.81%
National Average
5.37%

How to save on real estate commission

There are several ways you can pay less on commission than the national average 5.49% rate (or your local average):

⛔️ Avoid FSBO: Listing without a realtor — aka for sale by owner (FSBO) — could potentially help you save by cutting out the listing fee. But we don't recommend this approach for most sellers.

FSBO sales require a huge amount of time and effort, and typically bring a lot of legal and financial risk. There's a good chance you'll take a bigger hit on the final sale price than you'll actually save on realtor fees!

We recommend low commission real estate companies to get the best of both worlds: expert guidance and service for a fraction of the typical rate.

Hire a low commission real estate company

There’s a wave of new real estate companies offering the same general listing services and support as conventional realtors for realtors for a low flat fee or percentage (as little as 1%) instead of the typical 2.5–3% rate.

Although the percentage difference seems small, it can add up to thousands of dollars in savings for home sellers. Different companies create these savings in different ways:

  • Full-service discount brokers, like Redfin, use technology and team-based service models to lower operating costs and create savings.
  • Some agent matching services, like Clever Real Estate, match you with local realtors from top brokerages (think RE/MAX, Coldwell Banker) and pre-negotiate lower commission rates for you.

At a glance: Top low-commission real estate companies (nationwide brands)

Company
Listing fee
Avg savings*
1%
$7,375
1.5%
$5,550
2%
$3,750
Conventional agent
2.5–3%
$0
*Avg savings compared to 3% listing fee at four price points: $100k, $250k, $500k, $750k

» COMPARE: The companies with the lowest commission rates in 2022

If you’re looking to save without sacrificing service, Clever Real Estate is currently our top pick. It offers the lowest rates and biggest average savings of any nationwide brand: 1% listing fees, or a flat $3,000 for homes below $350,000. You choose from multiple agent matches rather than just the single option you’ll get from companies like Ideal Agent. And Clever’s partner agents represent top regional and national brokerages, like Keller Williams, Century 21, and more. That means you’re getting the same experience and support you’d expect from a conventional realtor — but saving thousands on commission.

🙌 Find the perfect agent, save thousands: Sellers who find their agent through Clever’s free service get pre-negotiated low rates and save an average of $9,600. View Agents.

Discount real estate brokerage Redfin offers a slightly higher 1.5% listing fee (though minimum fees apply and vary by market). Redfin does have some solid agents, but it has less selection than Clever. The style of service and support is also a bit different than what you get through Clever and conventional realtors: expect a slightly more tech-driven, hands-off experience.

Ideal Agent is a savings-centric agent matching service like Clever, but its rates are twice as high (2% vs. Clever’s 1%). It also offers less selection: you get matched with only one agent (Clever customers can choose between 2–3 and even more than that if they want). Ideal Agent has about 2,000 agents nationwide versus Clever’s 14,000 agents.

Try to negotiate a lower commission rate with a conventional realtor

You can absolutely try to negotiate commission rates with a conventional real estate agent. But it can be difficult — and even a bit stressful. You’ll have to negotiate with a professional negotiator, which isn’t very fun to do (at least for most people). And don’t expect a major price reduction — fractions of a percentage point are more realistic.

This is where agent-matching services like Clever and Ideal Agent can offer serious value: they have more leverage (a recurring source of new business for real estate agents at no upfront cost) to negotiate lower rates for you. For example, a one-off deal for a 1% fee doesn't make sense for an agent. But five 1% deals a month start to change the margins and make a big impact on the agent’s overall revenue.

👉 The bottom line: It's 100% worth trying to negotiate rates, especially if you've already found an agent on your own that you really want to work with. Just don't expect a major (or any) price reduction. If you don't have an agent lined up — or just want to compare options, which we recommend — definitely try the agent-matching service route.

Consumer-centric services like Clever, for example, can save you thousands on commission fees compared to if you'd found the same agent on your own. It’s also free with no obligation, so there's no risk in trying it out and seeing if you like who the agents Clever matches you with.

Summary: How to calculate real estate commission

  • Calculate your real estate commission fees (F) in dollars by dividing the commission (C) percentage by 100, then multiplying it with the home’s sale price (P).
  • Formula for calculating real estate commission: (C/100)*P=F
  • Total commission includes fees for two agents: the listing agent’s fee and the buyer’s agent fee.
  • Sellers typically cover both agents’ commission fees out of their sale proceeds (not out of pocket, unless they’re underwater on their loan).
  • The nationwide average commission rate for conventional realtors is 5.49% — but that varies by agent or brokerage, home value and type, and local market trends (5–6% is typical).
  • If you’re looking to save on commission, we recommend trying out Clever Real Estate. Clever's free, no-obligation service matches you with top agents from brokerages like Keller Williams, Century 21, RE/MAX and negotiates low rates for you.
  • You can also try negotiating commission rates with realtors on your own, but it will be harder to get a significant rate reduction.

FAQ about real estate commission calculators

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.

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.

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.[2]

The national average commission rate is 5.49%. In a typical real estate transaction, the two agents involved will split the total commission rate roughly 50/50. So generally, each individual agent involved in a real estate deal will walk away with ~2.75% of the final selling price. You can save on commission fees by trying to negotiate lower rates yourself or finding your agent through a low commission real estate company.

The cost of working with realtors to sell your home is calculated based on a percentage (usually 5–6%) of the selling price of your home. If you’re selling your home, you’ll pay the realtor cost for both your listing agent and the buyer’s agent. Use our real estate commission calculator to quickly compare realtor costs.

Tiered real estate commission structure calculator

Our tiered commission calculator provides five tiers to calculate a sliding scale commission.

Some discount and conventional brokerages and agents are adopting tiered commission structures (sliding scale) to offer more flexibility and competitive pricing for home seller clients — particularly those with more expensive homes.

With tiered commission structures, instead of a set percentage, the effective commission rate decreases as home values increase. After all, selling a $200,000 home is roughly the same amount of work as selling an $800,000 home. But a set 3% commission model means the agent is making a killing on the $800,000 home — and potentially not enough to even cover their marketing costs on the $200,000 sale.

Charging a slightly higher rate for less expensive homes ensures the agent nets a decent profit for their work. And lowering the rates for higher price homes ensures the agent isn’t being overcompensated.

» FIND: More Real Estate Calculators Online

ARTICLE SOURCES
[1]

National Association of Realtors. "2021 Profile of Home Buyers and Sellers." Accessed July 7, 2022. Updated 2021.

[2]

Bureau of Labor Statistics, U.S. Department of Labor. "<em>Occupational Outlook Handbook,</em>Real Estate Brokers and Sales Agents." Accessed July 7, 2022. Updated 2022.