When buying a home in Florida, there are a number of expenses to consider. To the price of the property it is necessary to add, among other concepts, municipal taxes, insurance, stamps and the real estate commission.

How is this value calculated, how much does it vary in relation to other states, and what should you take into account in relation to the expenses of this operation?

Real Estate Commission: What You Need to Know

If you are thinking of buying and selling apartments or
houses in the United States
, you should be clear about the
real estate capital
 needed to invest.

Real Estate Commission Calculation

Generally, a real estate agent’s commission is between 5 and 6% of the sale value of the property. So, for example, if the price of an apartment in Miami-Dade is $420,000, you will have to pay between $21,000 and $25.2,000 to the real estate broker.

This percentage must be clearly agreed in the purchase and sale contract before closing the transaction. In addition, the document must detail mandatory expenses aimed at protecting the operation:

  • Liability insurance.
  • Fire and flood insurance (depending on the area).
  • Annual fee of the condominium association.
  • Corporate structure.

  • Real estate tax
    .

Real Estate Commission: Differences with Other Areas of the United States

In general, commissions are negotiable, as they are not a fixed percentage. They may even vary according to the geographic region. Thus, Florida’s average real estate commission has some differences with other states in the country:

  • Louisiana, Indiana and Illinois are some examples of states with lower housing demand. Here you can find properties with commissions of between 2.5 and 3% of their value.
  • New York: It is among the most sought-after cities with an average commission of 5%.
  • California: In the most important cities in the state, the standard is 6%, although you can
    negotiate this value
    .


Tips
 for planning expenses before investing

Real Estate Commission

Organizing your capital will increase the profitability of your portfolio. Here are some helpful tips for planning your spending effectively and making a smart investment:

  • The lower the value of the property, the lower your commission outlay at the time of resale. Thus, it is key to look for strategies to pay less: for example, opting for the purchase and
    Home remodeling
    .
  • Florida is a state where you pay less taxes than in other areas. If you’re Tax Resident, you can take advantage of exemptions on your investment earnings, estate, personal and inheritance taxes. In addition, you can access a tax benefit of up to USD$50 thousand for your home.
  • Research convenient ways to finance your property: for example, with a mortgage loan at low interest rates or a real estate investment fund. You can also maximise the benefits of your investment by delegating the management of the property to a
    Real estate trust
    , through the payment of an annual fee.

Factoring in the real estate commission and other associated expenses is very important when listing
homes for sale in Miami
. This way you will know exactly how much money you need to allocate to this operation and calculate the ROI based on your costs.

References

Delgado, Paulina. (2023). People from Colombia are in the groups that register the most residential transactions. Time. https://www.eltiempo.com/mundo/eeuu-y-canada/colombianos-lideran-una-importante-clasificacion-de-bienes-raices-en-miami-834823

Sichelman, Lew. (2022). Is it true that real estate agents earn the same no matter their experience? El Nuevo Herald. https://www.elnuevoherald.com/noticias/finanzas/article257009747.html#storylink=cpy