What You Need to Know About Realtor Commission - Bosley Real Estate Ltd. Brokerage - Homes and houses for sale in Toronto including Cabbagetown, The Annex, Danforth Village, Lawrence Park and Riverdale

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08 April 2019
Bosley Real Estate

What You Need to Know About Realtor Commission

What You Need to Know About Realtor Commission

There is a lot more that goes into buying and selling a home than simply agreeing upon pricing and signing on the dotted line. The work begins long before the home hits the market and ends long after the sale has closed.

When preparing to sell a house, it is important to consider the Realtor fees associated with the sale, as sellers are often responsible for covering these costs. Given that there is no fixed rate, these fees can be a bit of a grey area.

In this blog, we want to break down how these commissions are calculated.

How Much is the Average Commission in Ontario?

Realtor commissions will vary from sale to sale depending on various factors including the property and market. The average real estate commissions total 5% of the agreed upon sales price with 2.5% going to the buyer’s agent and 2.5% to the seller’s agent.

The commission being offered to the buyer’s agent is listed on the Multiple Listing Service (MLS) platform. On these listings, you will see that it is not always the case that realtor commissions are split 50/50. Some listing agents will increase the portion being offered to the buyer’s agent as a way to incentivize these agents. This strategy is typically employed for homes that either need to sell quickly or listings that have gone stale from being on the market too long.

What Will You Get in Return for Real Estate Agent Fees?

First impressions are important in real estate - you only get one chance to list your house properly. List it too high and it may sit on the market looking less desirable, list your house too low and you miss out on maximizing your value. A realtor will guide you to the right price, assist in preparing your property so it sparkles for best first impressions and market your property appropriately to get top dollar.

Different agents offer different levels of service so it is important to have an understanding of what to expect when working with a particular agent. At a minimum, Realtors are often responsible for photographing the house, assembling and distributing marketing materials, hosting open houses, and negotiating on your behalf. Real estate is predicated on success and realtors only get paid if and when the house sells.

One of the greatest benefits of working with a realtor is having access to their wealth of knowledge. A real estate license enables realtors to sell in any market but you will find many specialize in certain property types, geographical areas, or price points. Working with an agent who knows the ins and outs of your property type and market will help you achieve the best outcome possible for your home.

When selling a home, be sure you do your realtor research. Setting the right commission rate will properly incentivize your agent to get the deal done but do not forget to get what you are paying for.

What are your thoughts on Realtor commissions? Have you had a noteworthy experience when either selling or purchasing? Let us know!