How to Calculate How Much a Real Estate Agent Makes

A real estate agent is paid only after the sale.

Real estate agents don't charge a straight fee, so if you want to know how much an agent will earn on a sale you will need to do some calculating. According to Lee Dworshak, a real estate agent with Keller Williams LA Harbor Realty in Rancho Palos Verdes, California, real estate agents work on commission only, and do not receive any payment until the sale is completed. To calculate the amount that a real estate agent makes on a sale, you will need to know the agent's commission rate and the selling price for the property.

Instructions

1. Determine the real estate agent's commission rate. According to George Szkup, a real estate agent in Tuscon, Arizona, a typical commission is 3 percent each for the buyer and the seller's agents; however, this can be negotiated.

2. Determine the sales price for the home. This is the actual price that the buyer pays to the seller. You must subtract transaction costs such as attorney fees, survey costs or property document fees.

3. Multiply the sales price by the commission. For example, with a commission of 3 percent and a selling price of $500,000, the real estate agent would make $15,000 for this successful sale.

Tips & Warnings

• Remember, no commission is due the real estate agent unless the sale is consummated.

References

• "The Complete Idiot's Guide to Success as a Real Estate Agent"; Marilyn Sullivan; 2006
• Realtor.com: Do Some Realtors Negotiate Their Commission?