When listing your home for sale with a real estate agent, you will sign a listing agreement. A listing agreement is a contract between the homeowner and the real estate agent’s brokerage that will lay out the commission rate.
While some agents charge a flat fee, most real estate commissions are a percentage of the sale price.
The commission or concession structures are approved by the seller in the listing agreement. Usually, compensation is negotiated to balance the fees between the two agents involved in the transaction.
A seller may decide to offer an appealing concession to the buyer’s agent to help generate greater interest in their home. A competitive fee structure often motivates a buyer’s agent to show the home more frequently to their buyers. This can be a good strategy in a buyer’s market where the seller is competing with multiple other listings in the neighborhood.
While the real estate commission rate is fully negotiable, recent market surveys show the average total rate in Florida lands around 5.57% of the sales price. If you sell a $250,000 house, you would pay a $13,925 commission at 5.57%.
This might sound like a lot, but remember that the listing agent will cover marketing expenses which can add up quickly. If you negotiate a lower commission, the agent might cut corners on marketing to make up for the loss.
The agents involved in the transaction will usually have to pay their brokerage a percentage of the commission and will be responsible for taxes and other operating expenses. An agent only earns a commission when a property closes, so they are not compensated for the work performed on deals that fall through.
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