Understanding Real Estate Commissions in South Florida's Luxury Market

Demystifying the Commission Structure in Ultra-Luxury Real Estate

In the world of ultra-luxury real estate, where transactions are complex and stakes are high, the role of a premier brokerage and its agents is indispensable. A common question from both seasoned and new clients is how real estate commissions work. This guide provides a transparent overview of the standard practices in South Florida's high-end market.

What is a Real Estate Commission?

A real estate commission is the primary form of compensation for real estate professionals. It's a fee paid to the brokerages involved in a transaction for their services, which include marketing, negotiation, transaction management, and providing access to an exclusive network. It is not a salary, but rather a payment contingent upon the successful sale of a property.

How is the Commission Rate Determined?

In Florida, real estate commissions are fully negotiable and are not set by law. However, a prevailing market rate has been established through years of practice. For luxury properties, this rate typically falls between 5% and 6% of the final sale price.

This total commission is agreed upon when a seller signs a listing agreement with their chosen brokerage.

Who Pays the Commission?

It is a common misconception that the buyer pays the commission. In virtually all residential transactions, the seller is responsible for paying the entire commission.

This fee is paid at closing, where it is deducted from the seller's proceeds. The seller pays their own brokerage, who then shares a portion of it with the brokerage that brought the buyer.

How is the Commission Divided?

The total commission (e.g., 6%) is typically split between the two brokerages involved in the transaction:

1. The Listing Brokerage (Seller's Agent): Receives one half (e.g., 3%).
2. The Buyer's Brokerage (Buyer's Agent): Receives the other half (e.g., 3%).

From their respective shares, each brokerage then pays their agent based on their independent contractor agreement. This structure incentivizes cooperation between brokerages to bring the best buyer to the property, ensuring the seller achieves the highest possible price and best terms.

The Unseen Value of Expert Representation

For a UHNW client, the value provided by an expert agent far exceeds the commission cost. At Legra Group, our service encompasses:

• Global Marketing Reach: Leveraging the ONE Sotheby’s International Realty network across 81 countries to find the perfect buyer.
• Off-Market Access: Gaining entry to exclusive properties that are never publicly listed.
• Masterful Negotiation: Skillfully navigating complex deal terms to protect your financial interests, whether you are buying or selling.
• Discreet & Confidential Service: Ensuring your privacy is paramount throughout the entire process.

Ultimately, working with a top-tier agent isn't a cost—it's an investment in a seamless, confidential, and financially optimized outcome.

Disclaimer: This information is for general guidance only. Commission rates and structures are always negotiable and should be discussed directly with your real estate professional.