Real Estate Commission Calculator
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?
Real estate agents that want to be sure not to overcharge their clients might have different rates depending on who represents who. For example, we charge a max. of 4% in Portland and SW Washington where we earn 1.75% commission and give 2.25% to the buyers agent, which is one of the most commonly offered rates to buyers agents in the area.
Then if we represent both the buyer and the seller and there is no buyer’s agent involved (this is rare and something we only do if the seller wants us to) then the total commission goes down to 3%. Finally, if a seller approaches us with a buyer and wants us to supervise an off-market sale (let’s say a family member selling to another, or a tenant buying from a landlord) then the total charge is just 2% – since we are not even putting their home on the market and there is no buyer’s agent involved. Bottom line, if we save money we want to pass that on to the client. This is not true for all Realtors, but many will have some sort of commission scale where the client will pay less in certain circumstances.
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 might require a higher commission rate offered to the buyer’s agent. When prices are really low, my team has a minimum flat commission charge of 3,000 (which would be 2% off a sales price of $150,000). Anything under 150,000 we would also recommend the seller offer the buyer’s agent a commission of 3%, which would put the total at 5%.
In our area (currently) anything priced over 1.5 million is considered really high. Typically our real estate commission is reduced (depending on how high the price tag goes) somewhat and we can also safely reduce the commission we are offering the buyer’s agent a bit and still meet their expectations. 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 max. is 4% 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!
