How to calculate a real estate sales commission, with a worked example

01What is the method in one line?

Commission = the price on the signed contract × the agreed rate. When it is paid, and what happens if the sale is cancelled, are terms of your agreement with the broker or the salesperson, and they have to be written before the sale, not after it.

Rates and terms differ between companies and projects. The figures below are an illustration, not a market rate.

02The example sale

The same unit as in the instalment schedule example: an apartment sold off-plan for 3,000,000 EGP, contract signed on 1 November 2026, 10% down payment on signing, then 75,000 every quarter. It was sold by an outside broker whose agreement for this project says:

• Rate: 2% of the price on the signed contract
• Half the commission when the client's down payment has cleared
• The other half when the client has paid 20% of the price
• If the sale is cancelled before 20% is paid, the first half is recovered from the broker's next commission

• The instalment schedule for this unit, worked step by step

03Step 1: the commission

The base is the contract that was signed, not the price list. If the client was given a discount, the commission follows the discounted price (see the mistakes below).

04Step 2: when it is paid

Check: 300,000 + 4 × 75,000 = 600,000, which is 20% of 3,000,000. The second tranche falls due a year after the sale, on the day the fourth instalment cheque clears, not the day it is handed over.

05And an in-house sales team?

If the same unit is sold by the company's own salesperson, the rate is usually lower and a share often goes to the sales manager. With an example of 1% to the salesperson and 0.25% to the manager:

The same two questions apply: which price, and paid when. A salesperson paid in full on signing has been paid for a sale that may still be cancelled.

06Step 3: the sale is cancelled

Suppose the client stops after the down payment and two quarterly instalments: 300,000 + 2 × 75,000 = 450,000, which is 15% of the price. The 20% condition was never reached, so the second tranche never fell due, and under the agreement the first one is recovered.

The recovery is a line with its own date on the broker's statement, against the unit it came from. Netted silently into a smaller payment, it becomes an argument six months later.

07Where do commissions usually go wrong?

• The commission is calculated on the price list, and the client had a 5% discount: 3,000,000 × 2% = 60,000 instead of 2,850,000 × 2% = 57,000, so 3,000 is overpaid
• The whole commission is paid on signing, and the sale is cancelled before the client has paid enough to cover it
• A tranche is paid when the client's cheque is received, and the cheque bounces
• The same unit is claimed by two brokers, or by a broker and a salesperson, and both are paid
• A recovery is agreed by phone and never written against the unit, so nobody can say later what was deducted and why
• The rate is agreed per broker but not per project, so a new project with a different rate is paid at the old one

08How does Revora do this?

Revora CRM, by mbsystems, follows the same lines:

• A commission rate per broker and per project
• The commission is earned from the sale price × the rate, and recorded once per unit, so the same sale is not counted twice
• Broker payments can be partial; a payment larger than what is left of the commission is refused
• Each payment is made from a treasury and writes its accounting entry in the same step
• A statement per broker: what was earned, what was paid, and the rates per project
• Sales and manager commissions calculated from the contract
• A portal and an app for the broker: available units, reservations, their own sales and their own commissions

• Revora real estate CRM in Egypt

Ask for a demonstration on your own project: info@mbsyss.com, or Cairo +20 100 520 5900, Muscat +968 7277 7269, Vienna +43 681 8411 0547. The price is given as a quote for your company.