To compute commission on a real estate sale, an agent needs to know: 1) The total selling price (TSP) of the property, which excludes any miscellaneous fees or charges. 2) The agent's commission rate as specified by their realty company. 3) Commission is calculated by multiplying the TSP by the commission rate.

1. How do we
compute for
the
commission
on a sale?
COMMISSION
COMPUTATION

2. QUESTION: What terms do I need to
compute for my commission?
COMMISSION COMPUTATION

3. - You need to know the following to
compute for your commission:
 TSP or Total Selling Price
 Commission Rate
COMMISSION COMPUTATION

4.  TSP or Total Selling Price
- This is the amount of the property alone
without the miscellaneous fees and other
charges.
COMMISSION COMPUTATION

5.  Commission Rate
- This is your present rate at Innovare Realty
Solutions.
COMMISSION COMPUTATION

6. QUESTION: Is TSP or Total Selling Price
different to TCP or Total Contract Price?
COMMISSION COMPUTATION

7. - Yes, TCP is different because this term
already have miscellaneous charges and
other fees that the Developers are
including in the computation while TSP is
plainly the amount of the property itself.
Remember to not forget this!
COMMISSION COMPUTATION

8. QUESTION: What are the composition of
miscellaneous fees that you are talking
about?
COMMISSION COMPUTATION

9. - Miscellaneous fees “usually” include, but
is not limited to:
- Documentary Stamp Tax
- Transfer Fees
- Registration Fees
- Notarial and documentation fees
- Other administrative and handling fees
COMMISSION COMPUTATION

10. QUESTION: How much will I be able to get
on a sale?
COMMISSION COMPUTATION

11.  Just multiply TSP by your rate
𝐶𝑜𝑚𝑚𝑖𝑠𝑠𝑖𝑜𝑛 = 𝑇𝑆𝑃 𝑥 𝐶𝑜𝑚𝑚. 𝑟𝑎𝑡𝑒
𝐶𝑜𝑚𝑚𝑖𝑠𝑠𝑖𝑜𝑛 = 𝑃 1,500,000 𝑥 3%
𝐶𝑜𝑚𝑚𝑖𝑠𝑠𝑖𝑜𝑛 = 𝑃 45,000
COMMISSION COMPUTATION

12. QUESTION: How about tax? How much tax
will be deducted in my sale?
COMMISSION COMPUTATION

13. - Deduct 10% Withholding Tax from the commission
to get the Net Commission you will receive.
𝑁𝑒𝑡 𝐶𝑜𝑚𝑚𝑖𝑠𝑠𝑖𝑜𝑛 = 𝐶𝑜𝑚𝑚𝑖𝑠𝑠𝑖𝑜𝑛 − (𝐶𝑜𝑚𝑚𝑖𝑠𝑠𝑖𝑜𝑛 𝑥 10%)
𝑁𝑒𝑡 𝐶𝑜𝑚𝑚𝑖𝑠𝑠𝑖𝑜𝑛 = 𝑃45,000 − (𝑃45,000 𝑥 10%)
𝑁𝑒𝑡 𝐶𝑜𝑚𝑚𝑖𝑠𝑠𝑖𝑜𝑛 = 𝑃45,000 − 𝑃4,500
𝑁𝑒𝑡 𝐶𝑜𝑚𝑚𝑖𝑠𝑠𝑖𝑜𝑛 = 𝑃40,500
COMMISSION COMPUTATION

14. QUESTION: What if my sale have staggered
down payment?
COMMISSION COMPUTATION

15. - In cases where staggered down
payment, you will receive the
commission on a staggered basis also
or on a milestone schedule (every 3
months, every 5 months) depending on
the Developer.
COMMISSION COMPUTATION

16. So, always convince your client to have a
full down payment to receive all of your
commission, or majority of your
commission if you will not receive it
immediately.
COMMISSION COMPUTATION

17. QUESTION: Will I be receiving all
commissions if the client will pay for full
down payment?
COMMISSION COMPUTATION

18. - No, the client should also be approved
to the financing institution before
receiving the complete commission.
COMMISSION COMPUTATION

19. - If the client paid for full cash, then
that’s the time for the seller to receive
the full commission.
COMMISSION COMPUTATION

20. QUESTION: What are the documents we
have to sign?
COMMISSION COMPUTATION

21. - You need to sign the voucher that IRSC
will give you.
- If you will receive the voucher online,
print the voucher, sign it, scan it then
send it back to us as proof of receipt by
the seller.
COMMISSION COMPUTATION

22. Just remember that it depends on the
Developer if there are still deductions on
their commission release like VAT.
COMMISSION COMPUTATION

23. Those who get P 30,000 to P 100,000 a
month worth of commissions are
searching for clients everyday
(even if they are part-time sellers only
with full-time attitude)
COMMISSION COMPUTATION

24. “Think BIG
about what you want to achieve.
Think SMALL
about how to achieve it.”
- SUN TZU, Strategies for Marketing quoted
from “The Art of War”
END
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