The document discusses real estate commissions and the roles of listing and buying agents. It explains that the seller typically pays the total commission, usually 5-8% of the home's sale price, which is then split among the brokers and agents. Listing agents are responsible for marketing the home and managing showings, offers, and negotiations. Buying agents help clients find homes, make offers, and navigate the process up until closing. Both agents invest significant time and resources to assist clients through what is typically a complex real estate transaction.

1. appointments, holding open houses, prescreening for
qualified buyers, negotiating the offer contract and any seller
concessions, meeting inspectors and appraisers, and managing
critical dates and activities with lenders and title offices.
The selling agent (buyer’s agent) activities include; researching
properties and locations based on the buyers preferences,
helping the buyer get pre-qualified for a mortgage if necessary,
scheduling showing appointments with the listing agents, and
ultimately writing an accepted purchase offer. They help
buyers set up home inspections and negotiate repair items or
appraisal values. Buyer’s agents work closely with mortgage
and title professionals through the contract and loan process.
They accompany buyers on the final walk through inspection
a day or two before closing, make sure home warranties have
been ordered, and monies have been wired for closing.
Where Does The Money Come From?
The seller typically pays the total real estate commission
which is defined in the listing agreement. The listing agent’s
broker sets the commission they charge for selling through
their brokerage. The commission is a percentage of the sales
price, traditionally between 5 and 8 percent. A common
myth is that the commission is added to the home’s sales price.
While all seller fees are considered when determining a sales
price, buyers can rest assured that the appraisal will validate
the price of the home ensuring you are not overpaying. The
commission is not necessarily added to the sales price of the
home but is the cost of using a professional for handling what
is probably your largest financial investment.
What You Get for the Money
Realtors® make significant investments in their education,
training, marketing, technology and client relationships.
Agents will typically spend at a minimum 30 days with a
client. On average, agents will invest four months of time,
their personal money on marketing, open houses and gas
for showings. It takes the typical buyer 12 weeks to buy a
house, and about 15 homes viewed. Listing and short sale
sellers may take up to a 12 month commitment. Agents are
specialized real estate professionals licensed by the State and
deserve to be fairly compensated for their time and expertise.
It is the agent’s responsibility to sit down at the initial client
consultation, answer all questions and explain to the client
how the home buying/selling process works including where
all the money goes. Choose an agent you trust and feel
comfortable talking honestly with. With mutual trust, loyalty
and consistent communication, you will see again and again
throughout your real estate transaction just how valuable
your Realtor® is.
According to the Orlando Regional Realtor Association,
surveys show that many homeowners and homebuyers are not
aware of the full value a Realtor® provides during the course
of a real estate transaction. At the same time, agents have
generally assumed that clients understood the professional
expertise and months of dedication required to complete a
successful transaction. This article is going to explain what
professional services are included in the real estate commission
and how your agent gets paid.
Broker Commissions and Agent Splits
When you hire an agent, they are the broker’s representative
facilitating the transaction activities. Every real estate agent
must work for a real estate broker; by law they cannot act
independently and are not paid directly by the client. Agents
and brokers are licensed by the state of Florida. Not all
licensed agents and brokers are Realtors®. Those committed
to practicing real estate with the highest standards of ethics
join the Realtor® Associations.
Typically, there are two agents involved in a transaction; the
seller’s agent and the buyer’s agent. Both agents are paid by
the broker for whom they work. So, in a typical transaction,
the commission is split four ways. It is first split at closing
between the brokers, and does not have to be an equal split.
For example, a seller might agree to pay 7 percent total
commission, to be divided as 4 percent to the listing broker
and 3 percent to the selling broker.
Then, the brokers and their agents have an agreement for the
agent’s compensation. The agent’s share (the commission
split) could be as low as 30 percent for new agents up to 75
percent or more for veterans and successful agents. Subtract
from that up to 28 percent for federal taxes, and you can see
how agents typically net between one and 1.5 percent of the
total real estate commission.
Listing Agents and Selling Agents
The Florida Association of Realtors® has a great document
available called the The Critical Role Of The Realtor® In The
Residential Real Estate Transaction (www.orlandorealtors.
org/?page=realtordoesforyou). It itemizes over 230 steps your
Realtor® performs during a typical transaction. Here is a
brief overview of your agent’s responsibilities:
The listing agent (seller’s agent) activities include; researching
legal aspects of the property, researching similar sales
to determine fair market value, developing marketing
materials and advertising the property, scheduling showing
The Truth About
By Laura Diss, MBA, Realtor®, CDPE, GRI, MD Preferred
Real Estate Commissions
Laura Diss, MBA, REALTOR®
REALTY EXECUTIVES
407-388-4103
LauraDiss@RealtyExecutives.com
www.LauraDiss.com
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