In Florida, there aren’t set real estate commission fees or mandatory minimum fees. Instead, how much commission a real estate agent receives is 100 percent negotiable. Below, we’ll explore the competitive standard for realtor fees and things to consider when negotiating real estate fees.
The Competitive Standard for Real Estate Commissions in Florida
In Florida (and most areas), the typical real estate commission on residential properties is 5% to 6% of the sale price. For example, a home that sells for $300,000 would have a $15,000 to $18,000 commission. The listing agent and buyer’s agent split the commission 50/50.
Of course, there are exceptions to the typical competitive standard.
For lower-value homes
If you’re trying to sell a lower-value property, it’s harder to negotiate the commission to less than 5%-6% because the total commission simply won’t be that much after splitting with the other agent. After all, it could take the same amount of time and effort for a realtor to sell a $100,000 home as it does for them to sell a $400,000 home.
Six percent commission on a $100,000 home would only leave each realtor with $3,000 (before paying their brokerage fee, more below on that), whereas a six percent commission on a $400,000 would result in $12,000 for each realtor. After deducting brokerage fees, the $3,000 may not cover a realtor’s time and expenses.
For higher-value homes
The commission is more flexible for higher-value homes since the actual dollar amount the realtor walks away with is larger. In other words, you may have better luck negotiating with your agent down to a lower commission fee if you’re higher-value property. Just keep in mind that the more your agent stands to make from helping you sell your home, the more invested they may be in their work.
Examples of Real Estate Commissions
|
Home Value |
4% Commission |
5% Commission |
6% Commission |
|---|---|---|---|
|
$100,000 |
$2,000 per agent after split |
$2,500 per agent after split |
$3,000 per agent after split |
|
$400,000 |
$8,000 per agent after split |
$10,000 per agent after split |
$12,000 per agent after split |
|
$800,000 |
$16,000 per agent after split |
$20,000 per agent after split |
$24,000 per agent after split |
The above table does not account for what the broker will take as his fee, which is deducted from the real estate agents commission. Typically is anywhere from 10% to 40% of the commission.
Things to Keep in Mind When Setting Real Estate Commission in Florida
Your home is likely your largest investment. You want to keep as much money from the sale of that investment as possible. However, choosing a low-commission agent or negotiating a potential realtor’s fees down may not be the wisest financial move.
1. A higher commission is motivating for the listing realtor
You want a motivated listing agent working to get your top value for your home. And, a fair, competitive commission goes a long way toward motivating your realtor. At a lower commission, helping you sell your home may not be worth it.
If a realtor doesn’t feel like they’ll make enough off the sale of your home, they might not want to work with you. Or, they won’t put their full time and energy into your home’s sale. Either scenario isn’t great for a seller.
2. Buyer’s agents may overlook homes with a low commission
The commission is split between the seller’s agent and the buyer’s agent—often 50/50. Even if you get your realtor to agree to a low commission, such as three percent, that doesn’t necessarily mean it’s the right way to go.
After all, buyer’s agents may overlook homes with low commissions. They won’t show their clients your home because it’s not profitable for them and is a waste of time. Remember, realtors aren’t in the business to break even.
3. Discount real estate agents are discounted for a reason
Just because you can find a realtor who works at a discount doesn’t mean you should automatically choose to work with them. “Discounted” realtors might do real estate work as a side gig, making it harder to schedule showings. They might not have the business connections that full-time realtors have. And, they might not hire a professional photographer or spend money on social media advertisements, email marketing, and other forms of marketing.
The thought of “saving” money on realtor fees may seem enticing, but it could make your home take longer to sell and sell for les. And, the more days your home is on the market, the more pressure you might feel to lower the asking price.
4. Real Estate Agents Work For A Broker and Are Limited In Commission Negotiations
Real estate agents work under their broker, who takes a cut of all the commissions. The broker fee can be anywhere from 10% to 50%, so what the realtor gets at the end of the transaction can be much less than what you expect. The brokerage may also limit the amount a real estate agent is able to negotiate. For example, the brokerage may not allow a commission of less than 2.5% of the total transaction.
Why are Real Estate Agents So Expensive?
Real estate agents do not get paid unless the real estate transaction closes. This means much of a realtor’s time is spent in activities that do not bring home a paycheck. Real estate agents need to earn enough per transaction that they can have a living wage. For every 1 transaction that closes, there are 5-10 that do not close and end up taking a considerable amount of time for the agent. The median gross income of realtors in 2021 is $54,330.
Is Working with a Real Estate Agent Worth the Expense?
“Losing” five to six percent of the home’s sale price to commission might seem hard to face, but not using a realtor at all could cost you more. For-sale-by-owner (FSBO) properties tend to sell for less than other homes. A recent report from the National Association of Realtors found that typical FSBO homes sold at a median of $225,000 in 2021 while agent-assisted homes sold at a median of $345,000. That’s a 42 percent difference, which is a whole lot more than a five to six percent commission.
Plus, FSBO sellers may still need to pay a commission to the buyer’s agent. To entice buyers’ agents to show their clients the property, the seller may need to offer the standard two to three percent, so you’re really only saving half of what you would pay if you have someone representing your interests and side of the transaction.
Final Thoughts on Real Estate Commission in Florida
When it comes to hiring a realtor, the phrase “you get what you pay for” couldn’t ring truer. Offering the competitive standard rate of five to six percent will ensure that your Florida realtor puts their time and energy into selling your home for top dollar. It’ll also help ensure that your home is in front of as many potential buyers’ eyes as possible.
FAQs About Real Estate Commission in Florida
Who pays realtor fees in Florida?
The seller ultimately pays real estate agent fees in Florida. However, the expense is factored into the selling price, meaning the buyer is really the one providing the money to cover the fees.
How much is the real estate commission if I do not buy a home?
Real estate commission is based on the home’s sale price once the transaction is completed. If you end up not purchasing or selling a home, your realtor likely ends up with nothing to cover their time and efforts. The risky nature of their job is one reason the competitive standard commission fee is five to six percent.
