Real Estate Commission paid to listing agent is negotiable. Fees may vary based on:
Type of property
Services Offered by broker/agent and other terms and conditions of real estate services.
Conventional rates are in the 5-6 percent. However, some agents offer lower fees in return for more volume and referrals.
On this site, I’ll try to explain in steps the type of services a real estate agent provides under contract with their clients. RECO real estate council of Ontario sets out rules and regulations when it comes to advertising real estate commissions charged to clients.
In order to explain commission concerns I’ve developed a listing of questions that home sellers may have in mind and provided answers to thos questions.
1. How commissions are calculated and determined? Real Estate commissions are paid as a percentage of the sale price.
2. What other fees do I have to pay to my agent? In most cases, real estate agents charge a commission based on the sale price and no other fees. You may come across some agents who charge marketing fees and ask for a retainer but it’s very rare.
3. How are commissions split between my agent and the agent representing the buyer? In this market the buyer agents are paid a 2.5% of the sale price. This fee is not fixed but widely accepted. So out of the total commission payble to your listing agent, 2.5 percent of that goes to the co-operating agent (the buyer agent who brings an offer on your p roperty). The remaining balance goes to your own agent (the listing agent).
4. Is the real estate commission negotiable? Similar to any other business transaction, real estate fees are negotiable between the seller and their agent. Some agent focus on offering low commission rates in return for more business, repeat clients and referals. Other agents don’t offer any discount on their fees but focus on certain clients. This could be a particular age groupe i.e. retirees, ethnic community, specific farming area, type of homes i.e. homes over a million dollar….etc.
5. What if I decide not to sell? Do I owe a commission to my agent? You will have to refer to the terms of agreement you made with your agent. In a typical case, you don’t pay any commission to your agent in case you decide not to sell or if the listing is expired.
6. Will paying more commission help sell my home? That’s a decision you will have to make. Under normal circumstances it’s the buyer who decides how much to pay for your home. Buyers and their agent come up with offer prices base on many factors and real estate commission payble to your agent is certainly NOT one of them.
In fact paying lower commission enables you to compete with other listings in the area given that you get all the services your agent provides to sell your home. MLS listing is one of the essential services you should ask for when listing your home. Realtors use the MLS system to trade in real estate.
Note: Real estate commission is not set by company. i.e. Remax Commission or Royal Lepage commission or any other realty brokerage commissions are not fixed. All commissions are negotiable.