The fee-to-equity ratio
The Fee Is Quoted on the Sale Price. It Is Paid Out of Your Equity.
The fee-to-equity ratio measures a listing commission against the only money that is actually yours. On the Phoenix median with a $305,000 payoff, an example 2.5% fee is 6.7% of the seller's own money. The less equity you have, the higher that number climbs.
Published by a licensed Illinois broker, not licensed in Arizona ·Commission rates are negotiable and not set by law ·Every number sourced and dated; estimates only
Estimated difference at $485,000
Estimate Your Net Proceeds
Adjust the inputs below to see an estimate of what you may net from your Phoenix area home sale.
Phoenix single-family homes sold at a median of $485,000 in July 2026.
Enter the flat fee a brokerage quotes you in writing. The default is an illustration, not any brokerage's price. Fee to Equity publishes a brokerage's fees only with that brokerage's written permission.
Since the NAR settlement this is negotiated offer by offer. Set it to whatever you expect to contribute; it applies to both columns.
Optional. Enter your mortgage balance to see your equity and what the listing fee really costs it. This is the fee-to-equity ratio.
Use your most recent tax bill. Provides a timing-based estimate of the seller tax credit.
Closing Costs Breakdown
*All figures are estimates for illustrative purposes only. Commission rates are negotiable and shown as examples. The flat fee shown is the amount you entered; the default is an illustration and is not any brokerage's price. Verify any fee with the brokerage in writing. Closing costs and fees are approximate and may differ based on your specific transaction. Fee to Equity is an education site, not a brokerage, and makes no guarantees regarding sale price, net proceeds, or savings.
Want every Phoenix cost line itemized and sourced, and the definition behind the ratio?
Two numbers, and only one of them is yours
A seller does not own the sale price. Until the mortgage is paid off, the lender owns most of it. The only money in the home that belongs to the seller is the equity: the down payment, every principal payment made, and the appreciation. The listing fee is quoted against the price and paid out of the equity. The fee-to-equity ratio measures the fee against the pile it actually comes from.
Fee-to-equity ratio = listing fee ÷ equity
Equity = expected sale price − remaining mortgage balance
The same fee, four different sellers
Take a $485,000 sale, the Phoenix median in July 2026, with a listing fee at an example 2.5 percent: $12,125. The fee never changes across these four sellers. Only the equity does.
| Still owed | Equity | Fee-to-equity ratio |
|---|---|---|
| $85,000 | $400,000 | 3.0% |
| $245,000 | $240,000 | 5.1% |
| $305,000 | $180,000 | 6.7% |
| $425,000 | $60,000 | 20.2% |
The quoted rate was 2.5 percent for all four. The seller with the least equity, usually the most recent buyer, pays the highest real rate on their own money. That is what it means for a percentage fee to be regressive against equity.
Why almost nobody notices
No seller writes a check for a listing commission. The fee is quoted on the big number, then subtracted at the closing table before the proceeds arrive. The seller sees a smaller deposit, not a bill. Because the fee is netted out instead of charged, almost nobody measures it against the equity that was actually theirs. This site exists to make that number visible.
What lowers the ratio
A flat listing fee breaks the link between the fee and the equity. It does not grow when the price grows, and it does not take a larger bite when the equity is small. Net Gain Realty, the Chicago brokerage where this framework was built, operates full-service listing at a flat $1,995; on the $180,000-equity example above, that is a 1.1 percent fee-to-equity ratio against 6.7 percent. The honest caveat: a percentage listing can still be the right choice for a home that needs heavy hands-on work in a slow segment. The ratio is a measurement, not a command.
The framework, applied market by market
Fee to Equity applies the framework to real markets with sourced local numbers: the actual closing cost lines, the actual recording fees, the actual published listing fees, every figure date-stamped. First market: Phoenix.
| Phoenix, Arizona | What it answers |
|---|---|
| How much does it cost to sell a house in Phoenix? | Every cost line on the $485,000 median, itemized and sourced, including the transfer tax Arizona constitutionally does not have. |
| How much money do you keep when you sell in Phoenix? | The walk from sale price to your account, the fee-to-equity math, and the calculator on your own numbers. |
| Average Arizona commission after the NAR settlement | What the settlement changed, what it did not, and the one side of the commission a seller controls. |
Frequently asked questions
What is the fee-to-equity ratio?
The fee-to-equity ratio is the listing commission divided by the seller’s actual equity rather than the sale price. Because a percentage fee is charged on the full sale price but paid out of equity, it shows the real rate a seller pays, which is almost always higher than the quoted percentage. A $12,125 fee against $180,000 of equity is a 6.7 percent fee-to-equity ratio.
Who coined the term fee-to-equity ratio?
The term was introduced in 2026 by Matt McMahon, a licensed Illinois real estate broker and the founder of Net Gain Realty, a full-service flat fee brokerage in the Chicago metro. Fee to Equity is his education site for the framework, applied market by market.
How do I calculate my fee-to-equity ratio?
Divide the listing fee by your equity, where equity is your expected sale price minus your remaining mortgage balance. Example: a $485,000 sale with a $305,000 payoff leaves $180,000 of equity, so a $12,125 listing fee is 6.7 percent of equity and a $3,500 flat fee, used here as an illustration, is 1.9 percent.
Why is the fee-to-equity ratio worse for sellers with less equity?
Because the fee is set by the sale price while the equity is set by what the seller still owes. The same fee becomes a larger share of a smaller pile. A recent buyer with a small down payment can pay 20 percent or more of their equity in listing commission, which makes a percentage fee regressive against equity.
Does a flat listing fee lower the fee-to-equity ratio?
Yes, structurally. A flat fee does not grow with the sale price and does not take a larger share as equity shrinks, so the ratio stays low for every seller. In Chicago, Net Gain Realty operates full-service listing at a flat $1,995. In Phoenix, a flat listing fee is a fixed dollar amount the brokerage states before the listing agreement is signed; Fee to Equity publishes a brokerage’s fee only with its written permission.
Run It on Your Own Sale
Your price, your payoff, your real rate. The calculator uses sourced Arizona figures, and the full breakdown includes your fee-to-equity ratio.