How Are Commissions Determined When Working With a Real Estate Agent?

The seller pays both commissions in most South Florida residential transactions. Total commission ranges from 5% to 7% of the sale price and is fully negotiable. Since August 2024, buyer agent compensation can no longer appear on MLS listings. Instead, the buyer's agent submits a commission request alongside their offer. Then the seller and listing agent decide how to respond.

Who Pays the Buyer's Agent and Listing Agent in a Florida Home Sale

Buyers ask this constantly. Sellers ask it even more. The answer surprises most people because the 2024 rule changes created confusion about who foots the bill. The reality has not changed.

On the Discover South Florida Podcast, Larry Mastropieri gave a one-sentence answer:

"In the majority of residential transactions, the seller is paying the buyer's agent's commission and the listing agent's commission. The buyer is not paying it."

That applies to single-family homes and condos listed on the MLS. It applies whether the deal closes at 5%, 6%, or 7% total. The seller funds both sides from the sale proceeds. The buyer brings their down payment and closing costs. Commission is not one of them.

How the 2024 NAR Settlement Changed the Commission Process

The National Association of Realtors settled antitrust lawsuits in 2024 for $418 million. Two practice changes took effect on August 17 of that year. Both changed how commission gets discussed. Neither changed who pays it.

Why Buyers Now Sign a Written Agreement Before Touring Any Home

Every buyer's agent must now have a signed buyer agency agreement in place before showing a single property. That document discloses how the agent will be compensated. It typically states the buyer owes their agent 2.5% to 3% if the seller does not cover it.

Larry broke down the key clause:

"The buyer's agency agreement says the buyer will compensate their buyer's agent 3% commission upon a successful closing if the seller does not pay it."

That language sounds like the buyer is on the hook. In practice, the seller almost always covers it. The agreement functions as a safety net for the agent, not a bill the buyer expects to pay out of pocket.

Why Buyer Agent Commission No Longer Appears on MLS Listings

Before the settlement, every MLS listing displayed what the seller offered the buyer's agent. The number was visible. Everyone knew. That transparency made negotiations simple but also raised antitrust concerns about price-fixing.

Now the buyer's agent submits a commission addendum with the purchase offer. The seller sees the request alongside the price and terms. Everything gets negotiated together.

Larry captured the shift in one observation:

"It used to be very clear. They're offering 2%, two and a half, 3%, whatever. Now the offer comes in almost blind. It was always a negotiation. We just changed how it's negotiated."

How Sellers and Listing Agents Negotiate Commission in Today's Market

Commission has never been a fixed number. It is a deal point. The listing agent advises the seller on what to offer. The buyer's agent requests what their agreement requires. The two sides negotiate from there.

The 2.5% Threshold That Keeps Buyer Agents From Walking Away

Larry's recommendation to sellers is straightforward. Offer 2.5% to the buyer's agent as a baseline. At that number, most agents accept and move forward. Drop below 2%, and resistance becomes common.

He shared the math on the podcast:

"If we offer two and a half percent to a buyer's agent, that's usually enough to keep them from complaining. If you offer 2%, a lot of times agents push back."

About half the time, a buyer's agent with a signed 3% agreement absorbs the half-point gap to get the deal done. The other half involves back-and-forth. Neither outcome is unusual. Both are manageable with the right listing agent guiding the conversation.

Why Smart Sellers Treat Commission as a Net Proceeds Calculation

Sellers who focus only on the percentage miss the bigger picture. Commission is not an isolated cost. It is one line item on a net proceeds sheet. If a buyer offers $100,000 above asking and their agent requests an extra half point, the seller still walks away with significantly more money.

Larry made this point with a specific example:

"If you're asking 600 grand and the buyer's agent brings a buyer willing to pay $700,000, you'd probably pay them more commission if you're going to net more."

The number of competing offers shapes this calculation. Multiple offers give the seller leverage to push commission down. A single offer with no backup shifts the leverage toward the buyer's side. Context drives every decision.

What Sellers Should Know When a Buyer's Agent Requests More Than 2.5%

It happens regularly. A buyer's agent submits an offer with a 3% commission addendum. The seller wants to counter at 2.5%. The agent pushes back. What follows is a negotiation that most sellers have never experienced before the 2024 changes.

Larry walked through the most common pushback scenario:

"The buyer's agent might say, 'If you pay me two and a half, my buyer has to pay the extra half point. They're not going to want to do that. So they'll reduce their price. You decide how you want to handle it.'"

That response puts the seller in a position to weigh the cost of the extra half point against the risk of losing the buyer. In a competitive market with multiple offers, the seller has room to hold firm. In a slower cycle with one interested party, absorbing the 3% and closing the deal usually nets more than restarting the showing process from scratch.

Commission Rules for Buyers and Sellers in South Florida After the NAR Settlement

The 2024 changes created noise, not a new payment structure. Sellers still fund the commissions. Buyers still benefit from representation they do not directly pay for. The only real difference is procedural.

• Sellers pay both the listing agent and buyer's agent commissions in the vast majority of residential deals.
• Total commission ranges from 5% to 7% and is negotiable on every transaction.
• Buyer agent compensation can no longer appear on MLS listings as of August 2024.
• Buyer's agents submit commission requests as addendums alongside the purchase offer.
• Buyers must sign a written buyer agency agreement before their agent can show any property.
• The commission split between agents is negotiated deal by deal, not set by industry standard.

Sellers across West Palm Beach, Palm Beach Gardens, and Palm Beach County need to understand these mechanics before listing. What you offer a buyer's agent directly affects how many agents show your home and how urgently they present it to their clients.

Know Your Net Proceeds Before You Commit to Listing Your Home

Commission confusion disappears when the math is on the table. We build a full net proceeds breakdown at the first meeting. Every fee. Every cost. Your projected take-home number at multiple price points. No guessing at closing. No line items you did not expect. Reach out to The Mastropieri Group, Realtors®. Call (561) 544-7000. We will show you exactly what you keep at every price before you decide to list.