A real estate agent's gross commission from one side of a $500,000 sale is usually $10,000 to $15,000 when the total negotiated commission is 4% to 6% and is split evenly between the listing and buyer sides.
That is gross commission, not take-home pay. Brokerage splits, referral fees, team fees, business expenses and taxes reduce the amount the agent keeps. The practice changes that took effect on August 17, 2024 also mean buyer-agent compensation generally must be covered by a written agreement before a buyer tours a home in person or through a live virtual tour.
$500,000 Sale Commission Examples
| Total negotiated commission | Total commission on sale | Approximate commission per side |
|---|---|---|
| 4% | $20,000 | $10,000 |
| 5% | $25,000 | $12,500 |
| 6% | $30,000 | $15,000 |
These examples assume the total commission is divided equally between the listing side and the buyer side. The written agreements may use different percentages, unequal splits or another fee structure.
Example: How Much Does the Individual Agent Keep?
Assume the sale uses a 5% total commission:
- Sale price: $500,000
- Total commission: $25,000
- Listing-side commission: $12,500
- Buyer-side commission: $12,500
If the agent has a 70/30 commission split with the brokerage, the calculation is:
- Agent's gross share: $8,750
- Brokerage's share: $3,750
- Agent's income before taxes and expenses: $8,750
The agent may also pay transaction fees, marketing costs, team fees or referral fees. Income taxes reduce the amount further.
With the same 70/30 split, one side of a $500,000 transaction would produce about $7,000 to $10,500 before taxes and expenses when the total commission is 4% to 6%.
The Basic Commission Formula
Use this calculation:
Sale price × negotiated commission rate = total commission
If the commission is divided equally between two sides, divide the total by two.
For a $500,000 sale:
- $500,000 × 4% = $20,000 total
- $500,000 × 5% = $25,000 total
- $500,000 × 6% = $30,000 total
The amount an individual agent receives depends on their side of the transaction and their agreement with the brokerage.
Does the Listing Agent or Buyer's Agent Make More?
Usually, the listing agent and buyer's agent receive separate portions of the negotiated compensation. A $25,000 total commission, for example, could provide $12,500 to each side.
The listing agent may earn more when the same agent or brokerage represents both the seller and the buyer, where permitted and properly disclosed under state law. In that situation, the agent or brokerage could receive compensation for both sides. The written agreements and applicable regulations still control the arrangement.
Are Real Estate Commissions Still 6%?
No. There is no legally required 6% commission.
Real estate compensation is fully negotiable and is not set by law, according to the National Association of REALTORS®. Compensation may be structured as a percentage, flat fee, hourly fee or another agreed method.
Under the practice changes that took effect on August 17, 2024, buyer agents generally must have a written agreement with buyers before touring homes in person or through live virtual tours. The agreement must state how the agent will be compensated. A seller may still offer to pay buyer-agent compensation, but those offers can no longer be communicated through the MLS in the same way as before.
Bottom Line
A $500,000 sale does not produce a fixed paycheck for the agent. Start with the negotiated commission, allocate it between the transaction's sides, then apply the agent's brokerage split and other expenses.
In the examples above, one side produces $10,000 to $15,000 in gross commission, while the individual agent receives less before taxes and expenses.