Real Estate Commission Calculator
Real estate commissions are typically the largest closing cost when selling a home. This calculator shows the total commission, the split between listing and buyer's agent, and your estimated net proceeds after commission. Following NAR settlement changes in 2024, commission arrangements are more negotiable than ever. Enter your expected sale price and commission rates to see your costs instantly.
Real estate commission formula
Total Commission = Sale Price x (Listing Rate + Buyer's Agent Rate) / 100
Net Proceeds = Sale Price - Total Commission - Other Closing Costs
Each agent's fee is calculated separately so you can see exactly how much goes to each side. The listing agent and their broker typically split their share internally; the amount shown here is the total paid to the listing brokerage.
What the 2024 NAR settlement changed
- Sellers are no longer required to offer buyer's agent compensation through the MLS.
- Buyers must sign a written buyer representation agreement before touring homes, specifying the buyer's agent compensation.
- Compensation can still be negotiated between all parties, including as a seller concession at closing.
- Commission rates remain negotiable; there is no fixed or mandatory rate in the United States.
- The settlement took effect August 17, 2024. Always confirm current rules with your local MLS or real estate attorney.
Real estate commission calculator: frequently asked questions
What is the typical real estate commission rate in the US?
Historically, total real estate commissions in the United States ranged from 5 to 6% of the sale price, split between the listing agent and the buyer's agent. Following NAR settlement changes effective August 2024, buyer's agent compensation is now negotiated separately rather than being mandated through the MLS. Commission rates vary and are always negotiable.
Who pays the real estate commission?
Traditionally, the seller pays the total commission, which is then split between the listing broker and the buyer's broker. Following the 2024 NAR settlement, buyers must now sign a written buyer representation agreement specifying compensation before touring homes, and commission arrangements have become more varied and negotiable.
How is real estate commission calculated?
Real Estate Commission = Sale Price x Commission Rate. For example, on a $400,000 home with a 5% total commission, the total fee is $20,000. This is typically split evenly (2.5% each) or in another agreed proportion between the listing agent and buyer's agent.
Are real estate commissions negotiable?
Yes. Real estate commissions are always negotiable. Sellers can negotiate with their listing agent, and since the 2024 NAR settlement, buyer's agent compensation must be agreed separately. Discount brokers, flat-fee services, and for-sale-by-owner approaches can reduce commission costs.
Can I deduct real estate commissions on my taxes?
If you are selling a primary residence, commissions paid reduce your capital gains but are not directly deductible as an expense. They increase your adjusted cost basis, which reduces taxable gain. For investment properties, commissions paid on sale are treated as a selling expense that reduces capital gain. Consult a tax professional for your specific situation.
Official sources
- National Association of Realtors (NAR): NAR Settlement Information.
- Consumer Financial Protection Bureau (CFPB): Owning a Home Resources.
- IRS: Publication 523: Selling Your Home.
Reviewed by the CalculatorHub team, edited by James Graham, 14 June 2026. See our methodology.