What Buyers And Sellers Don’t Know About Real Estate Commissions

Real estate commissions
Even after paying real estate commissions, most sellers still make more money by selling through a real estate agent.

Real estate commissions are a major expense for both buyers and sellers. In fact, they are oftentimes the single largest expense associated with a real estate transaction. But what do most people not know about real estate commissions? Here are a few things:

Common questions about real estate commissions

1. Who pays the commission?

In most cases, the seller pays the commission for both the buyer’s agent and the seller’s agent. This means that the seller is essentially paying for the buyer’s agent to represent them in the transaction. However, there are some cases where the buyer may pay their own agent’s commission. This is typically only done in situations where the buyer is not working with a real estate agent, or if the buyer is purchasing a property that is for sale by owner (FSBO).

2. How much is the commission?

The commission is typically a percentage of the sale price of the home. The average total commission rate is typically between 5% – 6%, but this can vary depending on the location, the price of the home, and the experience of the agent. It is important to negotiate the commission rate with your agent before you enter into a listing agreement.

3. How is the commission split?

The commission is typically split between the buyer’s agent and the seller’s agent. The most common split is 50/50, but this can also be negotiated. In some cases, the buyer’s agent may receive a higher commission than the seller’s agent, especially if the buyer is purchasing a property that is listed at a lower price.

4. Are there any other fees?

In addition to the commission, there may be other fees associated with a real estate transaction. These fees can include closing costs, marketing and advertising fees, and transaction fees. It is important to be aware of these fees before you enter into a real estate transaction. (At Live South Florida Realty, Inc., we do not charge marketing, advertising, or transaction fees.)

5. Can you negotiate the commission?

Yes, you can negotiate the commission with your agent. While every market and situation is different, commissions may be negotiated.


The old saying “you get what you pay for” applies to many things in life, and real estate is no different. Although many television shows such as Million Dollar Listing” make it appear as though real estate agents earn incredibly high commissions by simply showing expensive properties, this is far from reality. In fact, the majority of work that a real estate agent will conduct will never be compensated for. In actuality, it is the vast minority of times that an actual transaction will close based on the work conducted.

While it is important to be aware that real estate commissions are negotiable, it is equally important to obtain referrals and even interview real estate agents when you are considering to buy or sell a home.

Are you looking to buy or sell a home in the South Florida area? We can help! Contact Natasha at Live South Florida Realty, Inc. today! Also, be sure to download the free Florida Home Search app for your smartphone or tablet.

By natasha moore

REALTOR® with Live South Florida Realty, Inc.