This Real Estate Commission Calculator helps you quickly calculate each broker’s commission from a property sale. Simply enter the sale price, the total commission rate, and the percentage split for each broker to see their respective commission amounts.
How to Use this Commission Calculator with Broker Split?
- Enter the Sale Price: Input the total sale price of the property in the “Sale Price ($)” field.
- Enter the Commission Rate: Input the agreed commission rate percentage in the “Commission Rate (%)” field (Eg – 40/60 split between Broker A and Broker B). Note: Split % must be equal to 100%.
- Enter Broker Splits: Input the commission split percentage for each broker. If there are multiple brokers, click “Add Broker” to add more fields.
- Calculate: Click the “Calculate” button to view the results.
Who Can Use This Real Estate Commission Calculator
- Real Estate Agents: To figure out how much money they’ll earn from a sale.
- Home Sellers: To see how much they’ll pay in commission when selling their home.
- Home Buyers: To understand the commission costs involved in a home purchase.
- Real Estate Brokers: To calculate and distribute commissions among agents.
- Investors: To estimate the costs of buying and selling properties.
- Anyone Involved in a Real Estate Deal: To see how much commission will be paid or earned.
Understanding Real Estate Commissions
1. What is a Commission? A commission is a fee paid to real estate agents for helping buy or sell a property.
2. Percentage of Sale Price: The commission is usually a percentage of the home’s sale price, like 5-6%. For example, for a $100,000 home, a 5% commission would be $5,000.
3. Who Pays the Commission? The seller typically pays the commission when the house is sold.
4. Splitting the Commission: If both a seller’s agent and a buyer’s agent are involved, they usually split the commission. Each might get half, so if the total commission is 6%, each agent might get 3%.
5. Negotiable Rates: The commission rate isn’t fixed; it can be negotiated between the seller and the agent.
6. Payment Timing: The commission is paid only after the sale is completed, which means when all the paperwork is finalized and the house is sold.
Example Calculation:
Suppose a property sells for $600,000 and the total commission rate is 6%. The listing broker has agreed to a 27/73 split with Broker A and Broker B.
Total Commission = 6% * $600,000 = $36,000
Broker A’s commission = 6% * 27% * $600,000 = $9,720
Broker B’s commission = 6% * 73% * $600,000 = $26,280
By following these steps, you can accurately calculate commissions when multiple brokers are involved in a real estate transaction, each with their own agreed-upon split of the total commission.
Real Estate Commission Examples for Different Prices and Rates
| Property Price | 4.50% | 5.00% | 6.00% |
|---|---|---|---|
| $10,000,000 | $450,000 | $500,000 | $600,000 |
| $2,000,000 | $90,000 | $100,000 | $120,000 |
| $300,000 | $13,500 | $15,000 | $18,000 |
| $20,000,000 | $900,000 | $1,000,000 | $1,200,000 |
| $500,000 | $22,500 | $25,000 | $30,000 |
Is Getting a Real Estate License Worth It?
What is it?
A real estate license allows you to help people buy, sell, or rent homes. To get one, you need to take classes and pass a test.
Why It Might Be Worth It:
- Good Pay: You can earn a lot of money by selling properties.
- Flexible Hours: You can choose your own schedule.
- Helping People: It’s rewarding to assist others in finding their dream home.
- Growing Field: There are always new opportunities as people buy and sell homes.
Challenges:
- Costs: You’ll need to pay for classes and tests.
- Competition: It can be tough to stand out in a crowded field.
- Income Variability: Your earnings can fluctuate, especially when starting out.
Do You Need a License to Earn Commissions?
You don’t need a license to buy property yourself, but if you want to earn commissions by helping others buy or sell property, you do need a license. It’s required to legally represent buyers and sellers and handle real estate transactions.
Average Real Estate Commission Rates by State
| State | Avg Commission (%) |
|---|---|
| Alabama | 5.54% |
| Alaska | 5.01% |
| Arizona | 5.66% |
| Arkansas | 5.70% |
| California | 5.16% |
| Colorado | 5.56% |
| Connecticut | 5.36% |
| DC | 5.28% |
| Delaware | 5.20% |
| Florida | 5.51% |
| Georgia | 5.86% |
| Hawaii | 5.41% |
| Idaho | 5.67% |
| Illinois | 5.27% |
| Indiana | 6.06% |
| Iowa | 6.13% |
| Kansas | 5.82% |
| Kentucky | 5.71% |
| Louisiana | 5.22% |
| Maine | 6.02% |
| Maryland | 5.48% |
| Massachusetts | 5.27% |
| Michigan | 5.95% |
| Minnesota | 5.55% |
| Mississippi | 5.60% |
| Missouri | 5.77% |
| Montana | 5.65% |
| Nebraska | 5.73% |
| Nevada | 5.10% |
| New Hampshire | 5.17% |
| New Jersey | 5.15% |
| New Mexico | 5.81% |
| New York | 4.68% |
| North Carolina | 5.54% |
| North Dakota | 5.98% |
| Ohio | 5.79% |
| Oklahoma | 5.65% |
| Oregon | 5.41% |
| Pennsylvania | 5.42% |
| Rhode Island | 4.88% |
| South Carolina | 5.92% |
| South Dakota | 5.98% |
| Tennessee | 5.78% |
| Texas | 5.98% |
| Utah | 5.41% |
| Vermont | 5.98% |
| Virginia | 5.56% |
| Washington | 5.65% |
| West Virginia | 5.42% |
| Wisconsin | 5.88% |
| Wyoming | 5.48% |
In summary, a Real Estate Commission Calculator makes it easy to figure out how much each broker earns from a property sale. Whether you’re an agent, buyer, or seller, this tool helps you quickly see the commission amounts based on the sale price, commission rate, and broker splits, making the process clear and straightforward for everyone involved.
