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Agents Commission

Most people in Mississauga who want to buy or sell property seek the assistance of a real estate agent. However, many people who have not previously owned a home and are on the lookout for their first property have no idea how real estate agents are paid, and are thus trying to manage their home search without one to save money. It's important to do your research on any topic before you make a decision, so before you decide to hire or not hire a real estate agent, take a look at this article on real estate commissions to see what you can expect to pay.

First time home buyers, and any time home buyers for that matter, are in luck, because in Ontario the services of a real estate agent are almost always free to the buyer. Why? Because you don't pay a real estate agent on an hourly basis like you would pay the lawyer who will be going over the legal language of the offers on any homes for sale. Real estate agents are paid a commission, which is expressed as a percentage of the purchase price. And it's the SELLER who is losing this money, not the buyer.

Suppose you are the seller and you're wondering whether you should hire an agent or not. Obviously agents can sell certain properties faster and all that, but how much would you have to pay him or her to do it? And how much are you going to have to pay the buyer's agent? In the Greater Toronto Area, the most common figure for commissions is 5%. That's 5% in total, not 5% each, off the agreed upon purchase price of the house. So the more your house is worth, the more you will end up paying to hire an agent.

So if you have a really expensive home - say it's worth 2 million dollars - are you stuck paying a whopping $100,000 for help selling your home? Actually, no. There is no mandated fixed rate. In fact, it's against the law to fix the rate. Which means it's totally negotiable. The more your home is worth the better your negotiating position is, since agents will be competing to list the property. Thus you're more likely to get a discount with beachfront real estate than a cheap suburban condo.

Sell-it-yourself schemes would have you believe that you can avoid paying commission altogether if you sell your home yourself, but in actuality you have no control over whether the buyer who makes the offer will have an agent or not. If they do, then you're still stuck paying 2.5% off the purchase price of your property as the price for having that agent bring in the buyer.

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Mississauga Real Estate

Wednesday, May 22, 2024