Real Estate Commissions Explained
How Do Real Estate Commissions Work?
In this "moments with mom" video, Susan talks about real estate commissions in Southwest Florida, and Barabra shares how commissions worked back in the day in Connecticut.
Click on the video below to watch the video.
Who Pays The Commission?
Typically, the seller pays the commission in a real estate transaction here in Lee County, FL. As you heard in the video above, the same was true when Susan's mom was a Realtor in Connecticut years ago. While the seller pays the commission, the buyer is usually responsible for other costs within the transaction such as the home inspection, closing fees, etc.
Splitting the Commission
Typically, the commission is split in half between the listing agent (representing the seller) and the selling agent (representing the buyer). From there, the agent and their brokerage office then divide the commission in accordance with their agent-brokerage agreement.
What Does the Commission Go Towards?
For a listing agent, the commission money usually supports the cost of marketing that went into listing the home for sale. For example, the cost of professional photographs and videos. The cost to run print and online advertisements. The cost of yard signs, key copies, printed material, and the staffing to manage a listing.
For both agents, the commission is also paying for the agent's knowledge and experience with negotiating legal contracts, their time and effort in handling showings and fielding questions, and their assistance with the tasks needed to successfully complete the transaction.
What's the Typical Percentage?
In Lee County, Florida, the typical real estate commission is between 5% and 6% (as of July 2022). As Susan explains in the video, she has seen rare cases that go above and below these percentages, but most transactions fall in this range.
Questions About Commissions?
I'm sure you have more questions about how real estate commissions work in Southwest Florida. Please don't hesitate to reach out with questions or for clarification. Call us at 239-472-1950 or email [email protected]