What Is The Real Estate Commission in Florida?
Buying or selling real estate takes a lot of effort. However, if you work with an effective real estate agent, they should take the stress off your plate.
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But working with an agent means paying an agent. The realtor commission fees don’t sit well with many sellers because it seems like a large chunk of change. These fees are in addition to the other costs of selling a house like renovations, staging fees, escrow fees, and HOA dues. Before you know it, all the costs add up for real estate agents in Miami, FL. If you don’t keep abreast of all the relevant fees, you might be surprised when you try to sell your home.
What Do Real Estate Agents Charge in Florida?
Based on information from the National Association of Realtors, almost 90% of sellers partner with real estate agents in Florida when selling their houses. The first step to estimating real estate costs is learning the fee percentages in your area. Depending on the state and the specific brokerage, real estate fees may differ.
During most of the trades, the gross real estate commission in Florida falls within 5-6% of the price of the listed home. This fee comprises the buyer agent's and listing agent's commissions. Therefore, a home with a price of $400,000 will have a $20,000 - $25,000 commission fee once the sale is closed.
Most listing agents use the same rates in charging clients to help them sell their homes, ranging from 2.5 - 3%. That number goes for each buyer’s and seller’s agent. The total rate that the home seller will need to pay depends largely on the specific real estate agent's brokerage fee. It will also be a factor in the experience of the agent. Sometimes, the geographical market and the kind of clients influence the fee.
Homeowners often express annoyance and distress over the amount they pay in commission fees to their agents. This has led to an increase in the popularity of low-commission brokerages. These low-commission brokerages give you a chance to list your home with the services of an experienced agent in your area but for a lower fee. That means you take home more money from the sale.
For example, you could pay fees as low as 1% and still have top-notch services. Advances in technology and more connected networks make it possible for agents to charge lower commission fees but still provide excellent service.
Rates of Real Estate Commission in Florida
Florida has an average real estate commission of 5.25%. This is lower than the average in many parts of the country. Additionally, you must remember that Florida has enjoyed a relatively hot real estate market for quite a while.
In the example used above, the seller paid a total commission of $20,000 when the sale closed. However, the listing agent doesn't get all of this. The buyer is responsible for hiring their agent, but the seller pays their fee. Hence, in a case where the total commission paid is $20,000, each agent/brokerage gets $10,000.
Who Pays Florida's Real Estate Agent Commission?
Sometimes, situations arise where a real estate agent serves as both the buyer's agent and the listing agent. This scenario is regarded as a dual agency. At other times, the homeowner could be in charge of the home sale. However, many home sellers have dropped these kinds of transactions because they carry more risk for the homeowners.
The most common case is where both the seller and buyer hire their individual real estate agents. Each agent has the separate task of representing their client's interests and negotiating the best possible deal for them. They have to do this while working hand in hand to ensure that the sale is closed successfully.
It is common knowledge by now that the seller pays the commission fee to the agents once the sale has been closed. But even though the buyer doesn’t pay the agent directly, they do pay when they buy the house. Even though agents will tell potential buyers that their services are free, this is not entirely the reality.
The true reality of things is that the buyer and seller are both involved in paying the real estate agent commission fee, although they are not paying directly. The seller is the one who pays for both agents when the home sale is complete. However, the buyer may have had the option of buying the home without using the services of a buyer's agent. If they choose to buy without an agent, they may save 2.5 - 3% on the total cost of the house.
Hence, while it is accurate to say that the commission fee is paid by the seller in Florida, it is also important to remember that the buyer's agent fee comes from the amount paid by the buyer.
How Can You Save Money on the Real Estate Commission in Florida?
Not all brokerages charge such high fees. In fact, the future of real estate involves much lower real estate commissions. Florida is currently a hot market for the housing trade, so there is plenty of motivation to attract sellers by lowering fees. This means that real estate agents are much more likely to accept lower commission fees upon proper negotiation.
If you're planning to sell or buy a home in Florida anytime soon, it will do you a lot of good to learn about all the home sale costs and options to partner with a brokerage with lower fees. This will save you from many unforeseen costs that come with home trade.
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