The residential real estate commission is a fee paid to the real estate agent for their services in renting out a property. It is typically calculated as a multiple of the monthly rent.
To calculate the real estate commission, use the following formula:
\[ \text{Monthly Rent} = \frac{\text{Annual Rent}}{12} \] \[ \text{Commission} = \text{Monthly Rent} \times \text{Commission Rate (in months)} \]
Assume the annual rent for a property is $12,000, and the commission rate is 0.5 months. The commission amount can be calculated as follows:
Step 1 – Determine the monthly rent:
\[ \text{Monthly Rent} = \frac{\$12,000}{12} = \$1,000 \]
Step 2 – Calculate the commission:
\[ \text{Commission} = \$1,000 \times 0.5 = \$500 \]
Therefore, the commission for renting out the property is $500.