Real Estate Commission Calculator

How a commission is split between the two sides

A real estate commission is a percentage of the sale price, agreed in the listing agreement between the seller and the listing brokerage. That single number usually covers both agents in the deal, and the listing brokerage pays the buyer's brokerage out of its share under a separate agreement between the two brokerages.

On a $400,000 sale at 5.5 percent, the total commission is $22,000. A 50/50 split sends $11,000 to the listing side and $11,000 to the buyer's side. A 60/40 split sends $13,200 and $8,800. The total is the same either way; only the division moves.

Three things are worth separating before any arithmetic:

• The rate is a percentage of the price, so it scales with the sale.
• The split divides that total between the two brokerages, not between the agents and their brokers. Each agent then splits their side with their own brokerage, which is a separate arrangement.
• The net is what the seller keeps after the commission and after other closing costs, which the commission figure does not include.

Because the commission comes out of the sale price, it is paid at closing from the seller's proceeds rather than out of pocket before the sale. That is why the number on the settlement statement is a deduction rather than a bill.

Worked example: $400,000 at 5.5 percent

Take a $400,000 sale with a 5.5 percent total commission and an even split.

• Total commission: 400,000 × 5.5 / 100 = $22,000
• Listing side at 50 percent: 22,000 × 0.50 = $11,000
• Buyer side at 50 percent: 22,000 - 11,000 = $11,000
• Seller net before other costs: 400,000 - 22,000 = $378,000

Change one input and everything downstream moves. At 6 percent the total is 400,000 × 0.06 = $24,000, the net drops to $376,000, and each side gets $12,000. At 5 percent the total is $20,000 and the net is $380,000. Each half point on a $400,000 sale is worth $2,000, which is the number to keep in mind when a negotiation stalls over a quarter percent.

The same arithmetic works in reverse. If a seller wants to net $380,000 and has agreed to 5 percent, the required sale price is 380,000 / (1 - 0.05) = $400,000. Divide the target net by 1 minus the rate, not by 1 plus the rate, because the commission is taken out of the price rather than added to it.

What changed on August 17, 2024

The rules around buyer agent compensation changed in 2024 as part of the National Association of Realtors settlement. The NAR summary of the settlement lists the practice changes that took effect on August 17, 2024, and two of them affect the arithmetic on this page.

First, agents who use an MLS must have a written agreement with a buyer before touring a home. That agreement has to state the amount or rate the agent will be paid, and it has to state that broker fees and commissions are fully negotiable and not set by law. Second, offers of compensation to a buyer's agent can no longer be posted on an MLS, though a seller can still offer compensation off the MLS and can offer concessions on it.

The practical effect is that the buyer's side of the commission is now a separate negotiation from the listing side. A seller may still offer to pay it, and many do, because it keeps the home accessible to buyers who are financing the purchase. A buyer may instead pay their own agent directly, in which case the seller's commission is only the listing side.

The NAR consumer guide to written buyer agreements covers what has to be in that document, including the specific compensation term and the statement that it is negotiable.

Why every commission is negotiable

There is no federal or state schedule of real estate commissions. The rate is a term of a private contract, and the same brokerage can charge different rates on two houses on the same street. The 2024 settlement language is explicit that commissions are not set by law, which was true before the settlement as well.

What that means in practice: a listing agreement can set 4 percent, 5 percent, 6 percent, a flat fee, or a fee plus a percentage, and the seller can ask for a different structure before signing. The rate is one of the few line items in a home sale that is fully open to discussion.

Two limits are worth knowing. A commission cannot be so low that the brokerage loses money on the services it promised, and a listing agreement is a contract, so the rate is locked once both parties sign unless they agree to change it in writing. Negotiating after the listing is live is harder than negotiating before.

For a seller comparing offers, the useful comparison is not the rate alone but the rate against the services and the expected price. A 4 percent listing that sells for $10,000 less than a 6 percent listing costs the seller more in the end, which is why the commission should be judged next to the pricing strategy rather than on its own.

What each rate costs at four price points

The table runs the same arithmetic across the rates sellers ask about most. Each cell is the total commission, and the seller's net is the price minus that number before other closing costs.

The gap between 5 and 6 percent is $2,500 on a $250,000 house and $9,000 on a $900,000 house. That is the reason high-price listings see more negotiation over the rate: the same half point is worth four times as much at the top of the table as at the bottom.

Below is the same $400,000 sale at six rates, with the even split shown so the two sides are visible.

An uneven split changes the middle three columns and leaves the total and the net alone. At 5.5 percent with a 60/40 split, the listing side takes $13,200 and the buyer side $8,800, and the seller still nets $378,000.

Flat fee versus percentage

A flat fee listing replaces the listing side's percentage with a fixed dollar amount, and the buyer's side is usually still paid a percentage. The model exists because the listing side's work does not scale with the price of the house: the photos, the listing, the showings and the negotiation take a similar amount of effort on a $250,000 house and a $650,000 one.

Compare a $400,000 sale at 5.5 percent, which costs $22,000, with a $4,000 flat listing fee plus 2.75 percent to the buyer's side. The buyer side is 400,000 × 0.0275 = $11,000, so the total is 4,000 + 11,000 = $15,000. That is an effective rate of 15,000 / 400,000 = 3.75 percent, and it saves $7,000 against the percentage model.

The saving grows with the price while the flat fee stays fixed, so the effective rate falls as the house gets more expensive. That is the trade: the seller takes on more of the work and more of the risk, and keeps the difference.

What the flat fee model does not include matters as much as the fee. Some flat fee services list the home and nothing else, while others include photography, a lockbox, showing coordination and negotiation. Two flat fees of $4,000 can buy different amounts of work, so the comparison has to be against a written list of services rather than the headline number.

What the seller walks away with

The commission is one deduction among several. A seller's net is the sale price minus the commission, minus the payoff on any mortgage, minus title and escrow fees, transfer taxes where the state charges them, and any concessions agreed with the buyer. On a $400,000 sale at 5.5 percent, the commission takes $22,000, and the remaining costs commonly run into the thousands more.

Concessions are the line that surprises sellers most. If the seller agrees to $10,000 toward the buyer's closing costs, that comes off the net on top of the commission, so the effective cost of the deal is $32,000 rather than $22,000. A seller comparing two offers should add the concession to the commission before comparing the totals.

For the tax side, the commission is a selling expense that reduces the gain on the sale, and the HUD homebuying resources page is a starting point for the process rather than the tax rules. A tax professional or the IRS instructions for the relevant form are the right source for the gain calculation.

One number is worth calculating before the listing appointment: the net at the rate you expect, and the net at one point lower. On a $400,000 sale that is $378,000 against $382,000, a $4,000 difference. Knowing that number turns the commission conversation into a comparison of what the extra point buys, which is the only way to judge whether it is worth paying.

Commission terms are negotiable and vary by market and brokerage. This page does the arithmetic on the numbers you enter and is not a substitute for a listing agreement or legal advice.