How to Calculate Commission
Commission is what the seller pays the brokerages, figured as a percentage of the sale price and then divided by the agreed splits. It is the most common percentage problem on the exam, so getting the order right — total, then brokerage split, then agent split — matters.
Formula
Total commission = Sale price × Commission rate Brokerage/agent share = Total commission × that party's split %
Worked example
A home sells for $300,000 with a 6% total commission.
• Total commission = 300,000 × 0.06 = $18,000
• Listing and selling brokerages split 50/50 → 18,000 ÷ 2 = $9,000 each
• The selling agent is on a 60/40 split (agent keeps 60%) → 9,000 × 0.60 = $5,400
Check: 300000×0.06=18000; 18000/2=9000; 9000×0.60=5400. ✓
Key points
- Commission is figured on the actual SALE price, not the list price, unless the problem says otherwise.
- Convert the percent to a decimal first (6% = 0.06).
- Apply the splits in order: total → brokerage split → agent/broker split.
Common mistakes
- Using the list price instead of the sale price.
- Forgetting to convert the percent to a decimal.
- Applying the agent's split to the whole commission instead of to the brokerage's share.
When you use it
Commission questions are among the most common on the national exam, and the percentage skill they test is reused in points, tax, and appreciation problems.