Real Estate Commission Calculator
Updated 10/2024.
What is Real Estate Commission?
Real estate commission is typically a percentage of the sales price of a sold property that is paid to the seller’s agent’s Realty company directly out of escrow proceeds at the time of a sale. This commission calculator formula is fairly straight forward most of the time, but there are notable exceptions. Please note, all real estate commission is negotiable in the U.S. and there is no set standard. Also be sure to check any listing contract before signing to ensure you understand all of the possible fees and rates. (We never charge any fees, only the set commission if we sell a home, but there are other Realty companies that charge fees in addition to commission.)
When Real Estate Commission Rates are Variable
Below are three common examples of commission rates changing adjusting to circumstance.
1. Who is Representing Who?
After the National Association of Realtors rule changes in 2024, the listing contract should just be between the seller and the seller’s agent. The seller should no longer be offering the buyer’s agent a commission (at least not in the listing contract). The buyer’s agent can still request that the seller pay their commission when they present an offer. That buyer’s agent commission request is negotiable and isn’t set by a listing contract (it used to be). The listing contract should only set a commission obligation between the seller and the seller’s agent.
However, some seller’s agents may have varying percentages depending on who is representing the buyer (dual representation) or who found the buyer.
For example, our commission rate is 1.7% to sell a home (cancel anytime, no charge and no additional fees). If the buyer comes to us and is not represented, the total charge is 1.7%. If the buyer comes with a buyer’s agent who requests the seller pay their commission and the seller says no, the total charge remains 1.7% if we come to terms. If the buyer comes to us direct and asks us to represent them (dual representation with the seller’s permission), the total charge to the seller remains 1.7%. If the seller finds the buyer themselves and directs them to us, the commission remains 1.7%.
So for our default listing contracts, we charge 1.7%. But it is important to carefully read any other listing contract to see if the commission is variable depending on one situation or another.
2. Is the Seller Paying Buyer’s Closing Costs?
Another notable exception is not charging the seller a commission percentage based on the sales price, if the seller is also paying the buyer’s closing costs. For example, the seller accepts an offer of 450,000 where they are paying 10,000 of the buyers closing costs (see our article that explains why or why not a seller would pay the buyers closing costs) which means the seller will only actually net 440,000 for the property but pay commissions off of 450,000. This doesn’t seem fair (and it makes sense why) to many sellers. So often the seller will ask, or the Realtor will offer, to base their commission off the sales price minus any seller paid buyer’s closing costs. Note it is not traditional for the commission to be based on the sales price minus seller closing costs (which typically are not that high, at least in our area). Most of the time the homeowner would need to ask their Realtor to base their commission of this net price, as most of listing contracts in our area stipulate the commission is based off the sales price only, not any net calculations.
3. Is the Sales Price extremely High or Low for the Area?
Exceptions typically only occur in the extremes. In our area, anything under $200,000 is considered extremely low and the seller’s agent may have a higher commission rate, variable depending on the price of the home. This happens more than one might expect. For instance, while the average price of a home in the greater Portland metro is over $500,000, there are still lots for sale under $99,000 (and we sell lots too). When prices are really low, my team has a minimum flat commission charge of $3,000 (which would be 1.7% off a sales price of about $177,000). Anything under $177,000 we would charge a flat fee to list of $3,000.
In our area (currently) anything priced over 1.5 million is considered high. Typically our 1.7% real estate commission is reduced (variable depending on how high the price tag goes). The higher the price goes, generally speaking, the lower the commission rates will be.
Real Estate Commission Calculator
Whatever the sales price and commission rate might be, you can fill it in and use our simple real estate commission calculator below.
How Much are the Rest of Seller Closing Costs in Oregon?
We wrote that article for you as well. Check out the calculations of seller closing costs here (everything else other than commission costs).
Work with a Top 1% Sellers Agent
I’ve been selling in the greater Portland metro area since 2003. My small team is over 2,000 home sales. We pay extra to list our client’s homes on multiple MLS systems in Oregon, pay extra to feature our client’s homes on the top websites, provide pro. photos, 3D, interior design consultation, and more. Our commission is 1.7% and all of our contracts are cancel anytime for no charge. Give us a call today at 503-714-1111 or chat with the bot on this site. We’d love to connect today!
