Factors Affecting Real Estate Commission Payable in Florida

By Ciprian Morariu Published: December 14, 2023

Introduction to Real Estate Commission in Florida

Real estate agents and brokers get a commission on every deal closed by them. This means that they earn a specific percentage of the sale price for negotiating and executing a real estate transaction. 

If you are planning to join the real estate sector in the state, the first thought that should cross your mind is how much is real estate commission in Florida? This is critical regardless of whether you are a real estate agent, broker, or realtor in Florida.  

However, know how much you can get paid to estimate your earnings and manage your expenses. After all, earning commissions on deals is going to be your primary income stream in the real estate industry

Florida Real Estate Commission

Definition of Real Estate Commission

You might have heard or read that real estate agents and brokers earn commissions on every deal they are a part of. However, learn more about what constitutes real estate commission and how it is calculated.

A commission is a fee paid by a property owner, seller, or investor for services offered by a salesperson or a broker. Typically, a commission is a fixed amount paid to a seller’s a buyer’s agent. 

The commission amount is mutually agreed upon before a transaction is finalized. After a deal is closed, the commission is paid to the real estate agent or broker. 

If you are an independent real estate agent, you can earn the commission directly. However, for agents or a salesperson working in a brokerage, the commission is paid directly to the firm. 

Importance of Real Estate Commission in Florida

In this article, we will see how earning real estate commissions in Florida is influenced by various factors. This is after you meet the Florida real estate license requirements and get your Florida real estate license

Real estate commissions can directly affect the rate at which a property is sold. This means that sellers can increase their property listings’ asking price after factoring in the commissions. 

Furthermore, commissions can also vary as per the property’s size, location, and other factors. 

For example, you will see lower commissions in South Florida neighborhoods such as Palm Beach and Coral Gables. However, the commissions are higher in popular neighborhoods like Miami and Jacksonville. 

Florida Real Estate Agent Commission

Overview of Real Estate Agent Commission

A fixed or variable amount of moneypaid as a fee is called a commission in the real estate industry. Generally, the seller of a property pays the commission to the salesperson but this does not stop the buyer from doing so once a deal is closed.  

The average real estate commission in Florida hovers around 5.25% but this rate is flexible and subject to mutually-agreed changes. This is as per the industry average of 4-6% per transaction. However, it is lower than the average commission rate in the United States. Note that Florida’s real estate market has seen considerable growth in the last few years. 

In most real estate transactions in Florida, a salesperson or broker pulls in about 5 to 6 percent of gross commission. For example, if a property is being sold for $100K, the commission comes to around $5,000.  

The buyer’s agent and the seller’s agent split this amount equally, getting $2500 each. 

Factors Affecting the Real Estate Agent Commission in Florida

Commissions can be negotiated, before and even during the transaction. 

Let’s explore the factors that influence the overall price and commission of a real estate transaction: 

  1. Location of the property: The location of the property greatly influences the amount of real estate commission in Florida. Metro areas with top-of-the-line facilities command higher commissions.
  2. Market trends: When the real estate market is on a high, commission rates rise on the back of increased selling and buying activities and booming housing prices.
  3. Type of Property: Expect higher commissions on deals on villas, mansions, and penthouses as compared to that on selling or buying of apartments or co-living spaces. 
  4. Skill and Experience: Your industry expertise and knowledge will also determine your commission rate. Agents and brokers who have decades of industry experience command premium commissions on real estate deals. 

Different Types of Real Estate Agent Commission Structures in Florida

Florida real estate agent commission works on a split mode basis. The total commission is split between the buyer and seller agents involved in a real estate transaction. 

Sellers and their agents include the commission payable in the contract. Broadly, the commission in real estate is of three types: 

  1. Fixed Commission: Here, an agent receives a fixed amount for services delivered. This price is usually pre-determined by the seller and agreed upon by the agent. This means you get more confidence and transparency for both clients and agents. 
  2. Percentage-based Commission: Under this structure, a fixed percentage of the final selling price is payable. It is about 5-6% of the final selling price. 
  3. Hybrid Commission: This is a mix of fixed and percentage-based commissions. In this structure, an agent is promised a fixed commission and a variable componentin case they get a higher selling price. 

It is advisable to keep these commission types in mind as a part of learning how to get a Florida real estate license.

Real Estate Commission in Florida

Average Real Estate Commission in Florida

Explanation of Average Real Estate Commission

In the United States, the average real estate commission percentage is 5% to 6% though it varies between states, cities, and neighborhoods. 

How much is the real estate commission in Florida payable to real estate agents and brokers? As per the industry trends and reports, Florida has an average commission rate of 5.25%. 

Florida continues to offer opportunities for real estate professionals even though the commissions payable are less than the national average. 

It is the norm in the real estate industry that the total commission payable in a transaction is split down the middle between the seller and the buyer’s agents. Technically, it’s the property owner or seller who covers the bill for both sides, but they include this cost in the final price. 

If an agent is working with a brokerage firm, earnings fall to around 4-4.5% as commission. This is because the firm also takes part of the total commission. 

Factors Influencing Average Real Estate Commission in Florida

The commission rate in Florida also depends on the type and size of the property being sold. 

If you are a new or an upcoming real estate agent looking to get a Florida real estate license, understanding the key aspects that play in deciding your earnings is a must.  

Given below are several other factors that determine the commission on a real estate deal in Florida

  1. Location of the property: If you consider Florida’s real estate market, it covers a plethora of locations. Upscale neighborhoods with great views and the latest amenities bring in higher commissions. 
  2. Experience of the agent: Commission rates vary based on the experience of the salesperson. A seasoned agent in Florida uses extensive knowledge and network to command a higher commission rate. 
  3. Services offered by the agent: Provide a comprehensive service package to clients to command a high commission rate. The package may contain marketing, staging, and negotiating contracts and legal terms on behalf of clients. 

Comparison of Average Real Estate Commission Rates in Major Florida Cities

Wondering what percentage real estate agents make in Florida and how does it compare to other states?

Check out the real estate commission rate in Florida which is between 5-6%. In comparison, Ohio has the highest average commission rate of 5.80% while the District of Columbia has the lowest of 4.90%.