The beloved Sunshine State has no shortage of gorgeous homes and properties. 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, according to a survey of Florida agents. But that doesn't mean you will earn that amount as the buyer's agent in a deal. The commission on a home sale depends on the negotiations between the seller and the listing agent, and it's a pie that gets cut a couple of ways.
Here's what you need to know.
How Much of the Total Commission Does the Real Estate Agent Get?
As a Florida real estate agent, you can't get paid directly from a listing agent. Instead, you have to be sponsored by a broker that is licensed by the state. The broker gets paid by the listing agent and then pays you a portion of the profits.
The portion you get depends on the agreement you negotiate with your broker. For example, a 50/50-split is common for newer brokers. But you and your broker are not splitting the full commission amount.
Before you and your broker split the commission, the listing agent and their broker often take a cut. The commission is traditionally split four ways between the listing agent, their broker, the buying agent, and their 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 about $275,000, according to Zillow. Using the 5.5% average commission rate, the total payout on a $275,000 sale would be $15,125. Now, let's say the listing agent and buying agent split it 50/50, so both sides get $7,562.50. Then, the listing agent's broker and the listing agent split it 60/40. And, you (as the buying agent) and your broker split it 60/40.
The commission payouts would be as follows:
- Listing agent's broker (60%): $4,537.50
- Listing agent (40%): $3,025
- Buying agent's broker (40%): $3,025
- Buyer's agent (60%): $4,537.50
As the buyer's agent, you would receive $4,537.50 in commission from this deal.
How Redfin Is Mixing Things Up
While the above outlines the traditional commission breakdown, companies like Redfin have mixed things up a bit. Redfin offers home sellers the opportunity to list their homes for a commission fee of just 1.5%. Instead of paying a listing agent and their broker, sellers only pay Redfin — essentially cutting their listing fees in half.
Buyer's agents and their brokers are still paid similarly, but sellers can save thousands on their listing costs. On the downside, Redfin has faced some complaints from customers in regard to their service. Nonetheless, the company has highlighted a new way of structuring real estate deals and may have paved the way for more changes in the near future.
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.