Understanding your commission payment

Real estate agent commissions are the fees paid to agents for their services in buying or selling a property. Typically, these commissions are a percentage of the sale price of the home. This article explains how commissions are calculated at a standard rate of 6% and the timeline for depositing these earnings into a bank account.

Commission Calculation

Sale Example
For a home sold at $500,000:
- **Buyer/Seller Agent Commission**: 3% of $500,000 = $15,000 each

Broker Split
Real estate agents typically work under a broker. The $15,000 earned might be further split between the agent and their broker based on their agreement. Common splits include 50/50, 60/40, or 70/30, with the higher percentage going to the agent or sometimes the broker, depending on the arrangement.

### Net Commission
After the broker split, the agent receives their net commission. For example, with a 60/40 split in favor of the agent:
- **Agent's Net Commission**: 60% of $15,000 = $9,000

## Deposit Timeline

After closing the sale, the commission is first paid to the brokerage. The brokerage then processes the payment and disburses the agent's share. The time it takes for the commission to be deposited into an agent's bank account can vary:

- **Closing Day**: The transaction is finalized, and funds are distributed.
- **Brokerage Processing**: May take 1-2 business days to process the agent's cut.
- **Bank Processing**: Once the brokerage disburses the payment, it typically takes 2-3 business days for the funds to be available in the agent's bank account.

Real estate commissions are calculated as a percentage of the home's sale price, with the standard rate often being around 3%. The actual earnings an agent takes home will depend on the split with their broker. The entire process from closing to having funds available in a bank account can take approximately 3-5 business days post-closing, subject to brokerage and bank processing times.