• Money
    • Budget
    • Shop
    • Travel
    • Stories
  • Career
    • Advice
    • Entrepreneurship
    • Freelance
    • Small Business
  • Investing
    • General
    • IRA + 401K
    • Stocks + Bonds
    • Retirement Planning
    • Estate
  • The Basics
    • Student Loans
    • Credit Cards
    • Debt
    • Taxes
    • More
  1. Home
  2. The Basics
  3. Home Ownership
  4. How to Calculate Brokerage Commission

How to Calculate Brokerage Commission

By: Karina C. Hernandez
  • Share
  • Share on Facebook
Sellers typically pay both the listing and buyer's agent commissions.

Step

Ask your listing agent how much their broker charges. Each broker is different, but most charge an amount that is considered reasonable and customary for the market and area. For example, if the typical commission for a buyer's agent is 2.5 percent or 3 percent, listing brokers usually charge twice that amount -- 5 or 6 percent -- because the amount must cover both the listing and buyer's agent commissions.

Step

Multiply the commission fee by your home's asking price. For example, if paying a 6-percent commission on a $200,000 sale price, multiply 0.06 by 200,000. The result is 12,000, or a $12,000 commission to sell your home.

Step

Ask your mortgage broker for the loan origination fee. Federal mortgage disclosure laws require brokers to provide the origination fee within three business days of your application on a Good Faith Estimate. The loan origination fee is the commission you pay the broker for the service of originating, or making the loan. A 1-percent origination fee is typical; however, you can negotiate a lower fee, and higher fees may be subject to caps based on loan type.

Video of the Day

Step

Multiply the mortgage broker's origination fee, or commission, by your loan amount. For example, if you pay a 1-percent origination fee for a $200,000 loan, you pay the broker $2,000.

Show Comments

Related Articles

What Are the Different Types of Budgeting?

What Are the Different Types of Budgeting?

Money
Budget
By: Angela Stringfellow
How to Get Free Food and Grocery Coupons Online

How to Get Free Food and Grocery Coupons Online

Money
Budget
By: Lainie Petersen

PARTNER CONTENT

20 Common Money Mistakes to Avoid

20 Common Money Mistakes to Avoid

How to Raise Money for a Volunteer Trip Overseas

How to Raise Money for a Volunteer Trip Overseas

Investing
General
By: Elizabeth Layne
How to Find Out If the Government Owes Me Money

How to Find Out If the Government Owes Me Money

The Basics
Saving
By: Bonnie Conrad
How to Invest Money for the Best Return

How to Invest Money for the Best Return

Investing
General
By: Geoffrey Weed

Get Weekly Savings& Finance Tips.

  • Money
  • Career
  • Investing
  • The Basics
  • About
  • Contact Us
  • Terms
  • Privacy Policy
  • Copyright Policy
© 2019 Leaf Group Ltd. Leaf Group Media

Get Weekly Savings
& Finance Tips.

Money Made Easier.

Please enter a valid email.