REAL ESTATE FEES: How Much Is Fair?

Commissions:  How Much Is Fair?

When you sell your house the choice of realtors and companies can be confusing. There are a lot to choose from and a lot of claims about who is the best and why employing them is the right choice.

Claims of having amazing marketing systems are usually proven to be just a way to charge you a lot more than you likely need to pay to get your house sold. Aside from a properly prepared listing and pictures on the right MLS and on realtor.ca there is rarely any other form of marketing that will make much of a difference.

Trust me I know, I have been advertising in print media or on small websites for decades and they just don’t generate serious buyers. Thirty years ago ads got some attention from buyers, but not anymore.

The ads you see in the papers should be looked upon as announcements and as advertising for more listings, they are not expected to sell your house.  

So don’t pay top commissions just for fancy advertising.

What you do need is a good professional realtor who you get along with and does not seem to be trying to overwhelm you with how wonderful they are. They will be providing a variety of other services which are much more important than extra marketing.

The commission you ultimately agree to will depend on a lot of factors;

Is your house easily accessible and is it priced sensibly for it’s market range and the time you need to take? If your house is easy to for buyers to see and your price is very reasonable, it should sell fairly quickly. You should not be paying for ads that will not come out until after the house is sold or services that you will never use.

How much of the commission is being paid to the salesperson/broker that will ultimately bring the buyer who will buy the house? In Ontario that figure is usually 2.5%, although it could be more if the value of the property is very low or hard to access. Occasionally it is lower if the property is at the high end of the scale. It is not necessary that the listing and selling commission be equal.

Will you be buying another property from the same realtor? You can often save some money by working with the same realtor to buy as well as sell. The relationship that develops while they help you buy and sell should make the process go more smoothly for both of you.

In Ontario commissions range from about $1000 plus the selling broker’s fees and up to as much as you care to pay. Keep in mind that just like most other things in life, you tend to get what you pay for, but there is a limit to what they can do for you, and you should not pay for services that will make no difference. For most properties the rate should be 4.0% or less, including the fee for the buyer’s broker. If you are buying through the same person the rate could be even lower.

Call me and we can discuss what your needs are and how good a deal I can put together for you.

Thanks for taking the time to read this.  I look forward to hearing from you.