Understanding Realtor’s Commissions in Ontario
Most people understand that real estate agents work on a commission basis. Whether they are hired by the seller to sell their home or they work for the buyer to find them the perfect place to live, a real estate agent is only paid a commission when the transaction closes.
But what and how a Realtor is paid is not a “written in stone” rule.
What Types of Fees Can a Realtor Charge?
The Real Estate Council of Ontario mandates that there are one of three forms of fee arrangements an agent can charge:
- A fixed amount
- A percentage of the sale price
- A blend of a fixed amount plus a percentage of the sale price
It’s important to note that commission rates cannot increase based on the final selling price of a home, they can only decrease.Watch Full Movie Online Streaming Online and Download
Additionally, Realtors may charge fees for marketing of the home to cover the out-of-pocket expenses that include staging, videos, pictures, websites, etc. These should all be explained in the agreement to list, or representation agreement.
Can Realtor Commissions Be Negotiated?
The standard commission for a real estate transaction is a total 6% commission of the final selling price (excluding taxes if payable). This is broken down to 3% to the seller’s agent and 3% to the buyer’s agent.
The commission paid can be negotiated with the Realtor and/or the brokerage that the agent belongs. Many real estate agents and brokerages offer discounted commission rates or flat fees. It’s important for the seller and buyer to understand and have put in writing what services are included for any real estate transactions.
Many discount brokerages and agents do not provide a “full service experience” when they discount their commission, so you should always understand the different levels of service available.Watch movie online The Transporter Refueled (2015)
Will a Lower Commission Agent Affect My Home Sale?
In Toronto, with over 44,000 real estate agents currently registered with the Toronto Real estate Board (Spring 2016), the competition for clients can be fierce. Even the most optimistic projected home sales for Toronto (PDF) put the number of home sales at about 105,000 sales. It’s easy to see that some real estate agents will have under 3 sales, or even no sales, for the year, while others count their sales in the dozens.
An experienced real estate sales professional generally will not negotiate on their commission, while a part-time agent or an agent with little business or marketing experience is more willing to lower their commission for the sake of getting the client.
How this may affect the overall success of the sale and the experience level the client receives varies greatly.
Even in the current Toronto seller’s market a significant amount of work goes on behind the scenes to list and market a home. The greater amount of experience a Realtor has, the wider network of buyers they have and the experienced marketing savvy they put to work for the benefit of the seller all come into play, as well as the negotiating skill of the buyer’s representative (agent).
How Do I Decide On a Real Estate Agent?
To decide on the right real estate sales professional to represent your interests, whether you are a seller or buyer, follow these rules:
- Interview at least three real estate agents
- Ask about past recent personal sales, not sales from their brokerage
- Ask about their marketing plan
- Ask about recent sales in the area
- Ask if they will negotiate their commission
- When selling ask for a Comparative Market Analysis (CMA) of your property
The answers to the above questions will reveal a lot about the agents you interview and help you decide who has your best interests front and centre.