Real Estate Commission Calculator

How Real Estate Agent Commissions Work

Selling a home is one of the most significant financial transactions of a person's life, and understanding closing costs is essential. The largest closing cost for home sellers is traditionally the real estate commission fee, which is paid to the agents who facilitated the transaction.

Commissions are calculated as a percentage of the home's final agreed sale price:

For example, on a $400,000 home with a 5.5% commission rate:

• $400,000 × 0.055 = $22,000 total commission fee.

The Co-Brokerage Split

The total commission is typically split between the Listing Broker (representing the seller) and the Buyer's Broker (representing the buyer). A standard co-brokerage arrangement splits this commission 50/50, meaning each brokerage receives $11,000 in our example.

The Agent-Broker Split

Real estate agents do not receive this commission check directly. Under licensing laws, commissions must go to the sponsoring brokerage. The brokerage then pays the agent their share according to an agreed split:

• 70/30 Split: The agent receives 70% of the brokerage's share, while the brokerage retains 30% for desk fees, licensing, insurance, and marketing.
• In our example: The listing agent receives $11,000 × 0.70 = $7,700, and the brokerage retains $3,300.

Use our calculator to adjust listing values, broker splits, and agent caps to model exactly what you will pay or earn at the closing table.