Basic Real Estate Computations

Sales Commissions In the real estate industry are typically calculated as a percentage of the final selling price of the property. This fee is usually paid by the seller and is agreed upon in the listing agreement. To determine the commission amount, you multiply the property’s sale price by the commission rate. For example, if a home sells for $800,000 and the agreed commission rate is 6%, the total commission is $48,000. It is important to understand that this total commission is often split between the listing broker and the selling broker (the broker who brings the buyer). Each broker then shares a portion of their split with the individual sales associates who handled the transaction, based on their specific independent contractor agreements.