How to Calculate a Real Estate Salesperson's Commission

The success of a real estate salesperson is determined by the number of homes she is able to sell, but the amount of money she makes as a real estate salesperson is determined by the commission they earn for each sale. There are several factors that are considered in calculating a real estate salesperson's commission, including the real estate salesperson's role in the sale, the selling price of the home and commission rate that was negotiated when the home was listed for sale.

Difficulty: Easy

Instructions

Things You'll Need:

• Closing statement
• Real estate listing contract
• Calculator

1. Verify the final selling price of the home. This amount can be found on the closing statement that the title company provides during the closing process.

2. Determine the commission rate for the listing by reviewing the listing contract or the information found on the Multiple Listing Service (MLS).

3. Multiply the commission rate by the final selling price of the home to get the amount of the total commission. This commission must be divided up between the real estate salespersons that listed and sold the home. If the salesperson represented both the seller and the buyer in the real estate transaction, then he is entitled to all of the commission.

4. Review the salesperson's contract to determine how much of this commission is owed to his real estate firm. Real estate firms will often pay their salespersons based on what is called a commission split in which the firm gets a percentage of each commission.

References

• For Sale by Owner Center

[jenecequa]

on 10/4/2009 Straightforward and simple to understand. Thanks for the great article. I will use the information when I sell my home!