How to use the real estate commission calculator
- Enter the sale price from the accepted offer or a price you are considering.
- Enter the listing brokerage rate from the listing agreement the seller signed.
- Enter the buyer brokerage rate from the buyer’s written agreement, or 0 if the buyer has no agent. Then choose who pays it: the buyer, or the seller as a concession negotiated in the offer.
- Optional: agent split and fees. If you are an agent, enter your split with your brokerage and any per-deal fee to see your take-home commission.
- Optional: mortgage payoff. Sellers can add the loan balance to see what is left after commission and payoff.
The default rates are an example only. Commissions are negotiable, and the numbers in your signed agreements are the ones to use.
Real estate commission formula
Total commission = listing side + buyer side
Agent take = side commission × agent split − brokerage fee
Seller keeps (before other costs) = price − commission the seller pays − mortgage payoff
Worked example from a textbook. OpenStax’s Prealgebra 2e (section 6.3) gives a realtor a 3% commission on a $260,000 house: 0.03 × $260,000 = $7,800.
A full sale. A $400,000 home with 2.5% to the listing brokerage and 2.5% to the buyer’s brokerage, both paid by the seller, carries $10,000 + $10,000 = $20,000 in commission. If the listing agent keeps 70% of their side and pays a $500 transaction fee, the agent takes $10,000 × 0.70 − $500 = $6,500 and the brokerage keeps $3,500. With a $250,000 mortgage payoff, the seller has $400,000 − $20,000 − $250,000 = $130,000 before title, escrow, taxes and other closing costs.
How commissions work after the 2024 settlement
Rules changed on August 17, 2024, when practice changes from the National Association of REALTORS® settlement took effect. According to NAR’s settlement FAQs, offers of compensation to buyer brokers can no longer be communicated on the MLS, agents working with buyers need a written agreement before touring a home, and agreements must say that commissions are not set by law and are fully negotiable.
The practical result is that the two sides are more clearly separate. The listing agreement sets what the seller pays the listing brokerage. The buyer agreement sets what the buyer’s brokerage is owed. The buyer can pay that amount directly, ask the seller to pay some or all of it as a concession in the offer, or combine the two. That is why the calculator asks who pays the buyer side instead of assuming the seller does.
For a buyer, a seller-paid concession reduces cash due at closing but is part of the price negotiation. For a seller, agreeing to pay the buyer side lowers net proceeds just like a lower price would. Running both versions shows the trade-off in dollars.
What an agent actually takes home
A commission is paid to the brokerage, not directly to the agent. The brokerage then pays the agent a share under their independent-contractor or employment agreement. Splits are usually written as agent/brokerage percentages such as 70/30, and some brokerages instead charge a flat fee per transaction, a monthly desk fee, or a cap after which the agent keeps 100%.
On a $10,000 side, a 70% split leaves the agent $7,000 before any per-deal fee. If the agent is on a team, the team lead may take a further share. Agents also pay their own business costs and self-employment taxes from that amount, so the gross figure overstates what reaches their bank account.
| Side commission | 60% split | 70% split | 80% split |
|---|---|---|---|
| $6,000 | $3,600 | $4,200 | $4,800 |
| $9,000 | $5,400 | $6,300 | $7,200 |
| $12,500 | $7,500 | $8,750 | $10,000 |
Seller net proceeds and the Closing Disclosure
The seller’s figure here subtracts only commission and the mortgage payoff you enter. A full net sheet also includes title insurance, escrow or attorney fees, transfer taxes, property tax prorations, HOA fees, repair credits and any other concessions. These vary a lot by state and county, so ask your agent or closing attorney for an estimated net sheet before you accept an offer.
The Consumer Financial Protection Bureau’s explainer describes the Closing Disclosure, which totals the upfront costs of the loan and the real estate transaction. Compare the commission lines there with your agreements and with the figures from this calculator a few days before closing.
Flat fees, tiered rates and comparing listing offers
Not every listing agreement uses a single percentage. Some brokerages charge a flat fee, some a lower rate above a price threshold, and some a percentage with a minimum. To compare offers, turn each into dollars at the price you expect. At $400,000, a 2.5% listing fee is $10,000, while a $6,000 flat fee is equivalent to 1.5%.
Ask what each offer includes. Photography, staging advice, open houses, negotiation and transaction coordination are part of what a commission pays for, and the cheapest listing fee is worth it only if the services you need are covered. The calculator’s rate-from-dollars FAQ below shows how to convert any flat fee into a percentage for side-by-side comparison.
For price sensitivity, run the calculator at the list price and at the price you would accept. On a percentage commission, each $10,000 drop in price lowers a 2.5% side by $250, so the commission changes little compared with the price itself. On a flat fee, the commission does not move at all.
For buyers: planning for your agent’s fee
If you are buying with an agent, your written agreement states what your agent’s brokerage is owed and how. Enter that rate as the buyer brokerage rate, choose “Buyer” as the payer, and the calculator shows the dollar amount you may need to bring to closing at a given price. Then compare it with the scenario in which you ask the seller to pay some or all of it as a concession.
Lenders may limit how large a seller concession can be, depending on the loan type and down payment, so ask your loan officer before you write an offer that relies on one.
Sources & assumptions
How this calculator gets its numbers. Full method: our methodology.
- Each side’s commission = sale price × that side’s rate. Rates are whatever your listing and buyer agreements say; the defaults are examples only.
- The buyer-side amount is paid by the seller or by the buyer, as you choose.
- Agent take = listing side × agent split − brokerage fee per deal. Team splits, caps and franchise fees are not modeled.
- Seller net subtracts only the commission the seller pays and any mortgage payoff you enter; title, escrow, transfer taxes and prorations are not included.
Sources
- OpenStax (Rice University), Prealgebra 2e, 6.3 Solve Sales Tax, Commission, and Discount Applications. Commission = rate × total sales (3% on a $260,000 house is $7,800; $87 on a $1,450 stove is 6%), discount = rate × original price (35% off $140 is $49, a $91 sale price), and sales tax as a percent of the purchase price.
- National Association of REALTORS®, NAR Settlement FAQs. Since August 17, 2024: offers of compensation are no longer communicated on the MLS, agents working with buyers need a written agreement before touring a home, and agreements disclose that commissions are not set by law and are fully negotiable.
- Consumer Financial Protection Bureau, Closing Disclosure explainer. The Closing Disclosure totals the upfront costs of the loan and the real estate transaction; it is the document to check commission and other costs against before closing.
Last reviewed . Commissions are negotiable; the figures in your signed agreements and on your Closing Disclosure are the ones that count.
Frequently asked questions
How do I calculate real estate commission?
Multiply the sale price by the commission rate. On a $350,000 sale, a 2.5% commission is 0.025 × $350,000 = $8,750. If both a listing and a buyer brokerage are paid, calculate each side and add them.
Who pays the real estate agent commission?
The seller pays the listing brokerage under the listing agreement. The buyer’s brokerage is paid under the buyer’s written agreement, either by the buyer, by the seller as a negotiated concession, or by both. Since August 2024 these terms are set in the agreements rather than offered through the MLS.
Are real estate commissions negotiable?
Yes. Commissions are not set by law, and agreements must say so. You can negotiate the rate, a flat fee, or the services included before signing a listing or buyer agreement.
How much does an agent make on a $500,000 house?
It depends on the rate and the split. At 2.5% for one side, the brokerage receives $12,500. With a 70% split, the agent’s share is $8,750 before any brokerage fees, team splits, expenses and taxes.
Is commission included in closing costs?
For the seller, commission is usually the largest item deducted at closing and appears on the settlement statement. If the buyer pays their own agent, that amount is part of the buyer’s cash to close. Check the Closing Disclosure for the exact lines.
How do I work out the commission rate from a dollar amount?
Divide the commission by the sale price and multiply by 100. A $15,000 commission on a $300,000 sale is a 5% total rate.