The beloved Sunshine State has no shortage of gorgeous homes and estates. It can be a lucrative place to start your real estate career, but how much commission can you make?
Here's a closer look at how the commissions work in Florida, how much you can potentially earn, and how to get started.
How Much Commission Do Florida Real Estate Agents Make?
The average real estate commission rate in Florida is about 5.50% of the sale price in 2021, according to a survey of Florida agents. That’s the estimate of how much the average seller pays in real estate agent fees. But you'll probably never earn 5.5% of any deal. That's because of two main reasons.
First, the commission is negotiable, meaning the seller can try to get a lower rate. And second, the commission in a Florida real estate sale is typically split several ways — meaning you won't get it all for yourself.
How Much of the Total Commission Does the Real Estate Agent Get?
First, commission checks are cut to each brokerage at closing: the one that represented the buyer and the one that represented the seller, typically 50/50. Then the brokerages each pay a cut to the agents based on pre-arranged fee splits.
Remember, as a Florida real estate agent, you must be supervised by a licensed Florida broker. And your broker will always get a cut of the commissions for the homes you sell. A 50/50 split is common for newer agents, but you might negotiate a 60/40 split to help you keep more of the money you earn.
So, to recap, the commission is typically split among four people: the listing agent, the listing agent's broker, the buyer’s agent, and the buyer's agent broker.
Florida Real Estate Agent Commission Example
Let's look at an example to see how this works in practice.
The average home price in Florida is around $335,000 as of December 2021. Using the 5.5% average commission rate, the total payout on a $335,000 sale would be $18,425. Now, let’s assume you’re the buyer’s agent and you have a 60/40 split with your broker. We’ll also assume the listing agent has a 60/40 split with their broker.
First, the listing brokerage and buyer’s brokerage split the commission 50/50. Both sides get $9,212.50. Then, the listing agent's broker and the listing agent split their share 60/40. And, you (as the buyer’s agent) and your broker split your share 60/40.
The commission payouts would be as follows:
- Listing agent's broker (40%): $3,685
- Listing agent (60%): $5,527.50
- Buying agent's broker (40%): $3,685
- Buyer's agent (60%): $5,527.50
As the buyer's agent, you would receive $5,527.50 in commission from this deal.
How Discount Brokerages are Mixing Things Up
Discount brokerages (like Clever Real Estate, Redfin, or SimpleShowing) are offering to list homes for commission rates as low as 1%. This sounds like great news for sellers: they can list their homes for a fraction of the cost!
But there are several problems with discount brokerages:
- Agents aren’t willing to do much work for such low fees. So the listing agent might put the home in the MLS, but they’re not going to invest their time, money, or effort in marketing the home.
- Buyers agents aren’t incentivized to show the property to their buyers. Of course, the buyer’s needs come first, but if you can find them an ideal home with a reasonable commission split for you, you’re more likely to be excited about showing them that home, compared to one where you’ll get little-to-no commission.
- Even if the discount brokerage successfully sells the home, it probably won’t be for top dollar because none of the agents were excited about getting involved in that deal. Agents are much more likely to work harder to get top dollar for a home with a reasonable commission.
Ultimately, you end up with underserved buyers and sellers. But because this is a fairly new idea, buyers and sellers need to be educated on why this doesn’t work out as well for them in practice as it does in theory.
Get Your Real Estate License in Florida
Are you ready to start earning commissions as a real estate agent in Florida? Step one is completing the required education. The good news is, you can do it online from the comfort of home. Once completed, you'll need to pass the state real estate exam (which you can also take online) and find a sponsoring broker. Then, you can apply for your license and get to work earning that commission.