Real estate commissions are the largest transaction cost when selling. On a $500,000 sale at 6%, commissions are $30,000 — money that reduces your profit and overall return. Factor commissions into all hold/sell analysis and projected sale scenarios. Even a 1% commission reduction saves $5,000 on a $500,000 sale.

Detailed Explanation

Real Estate Commission is the percentage of the sale price paid to real estate agents when you sell the property. Traditionally 5–6% (split between buyer's and seller's agents), commissions have been evolving with new regulations and business models. Some sellers negotiate lower rates, use flat-fee brokers, or sell directly. This cost is deducted from gross sale proceeds when calculating net profit from a sale.

Example

Sample Result

6.00%

Based on a sample $385,000 property with $2,850/month rent, 20% down, 7% interest rate.

Related Calculations

Years Owned

Time elapsed since the property was purchased, calculated from the purchase date to today.

Profit If Sold

Net profit if sold today, based on actual years owned.

Return If Sold

Net sale profit as a percentage of initial cash invested, based on actual years owned.

Total Cash to Close

Cash needed at the closing table to acquire the property.

$88,550 Example

Total Cash Invested

Total cash committed to the property: closing costs, rent-ready, reserves, and negative cash flow.

$110,830 Example

All-In Cost Per Unit

Total acquisition cost (including closing and rehab) per unit.

$396,550 Example

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