There is always a feeling of guilt when you talk to your real estate agent about what you want to pay them, but it does not have to be an awkward conversation. They will not be upset you brought it up.
Your agent will explain to you why they may or may not be willing to lower their rate, but the topic is always open for discussion.
What Is The Commission Rate In Ontario?
The commission in Ontario is typically 5% of the purchase sale being split evenly to the buyer’s agency and seller’s agency (2.5% each). For example, if you sell your home for $600,000, the buyer’s agency and seller’s agency will both receive $15,000. The buyer or seller’s agency will then split with the agent, and the split may be 50/50 depending on their agreement.
What Am I Even Paying An Agent For?
As a buyer, you are paying your real estate agent to handle all the paperwork and avoid as many errors as possible. They look around for you to help you find your dream home and negotiate prices for you. They can also connect you to homes that are not even on the market yet.
As a seller, you are paying your REALTOR® to handle your paperwork as well and help you understand all the paperwork involved. They are also marketing and advertising your home by using their network of professional photographers, stagers and contractors.
The platforms they are using to advertise your home are endless:
- The agent’s profile
- The agent’s website
- Other listing websites
When Is It Appropriate To Discuss Commission?
When you are interviewing different agents to sell your home, ask them then. Discuss why you would like to lower the commission and if they agree, ask them what services they may not be able to provide. Marketing materials and advertising platforms may be taken away, which could affect how long your house is on the market.
Ask the agents about the market in your neighborhood. If the market is really hot, your REALTOR® may easily sway their commission, especially if your home is going to sell quickly. If your agent is helping you to buy and sell, they may be more willing to negotiate then too. It will be harder to negotiate if your agent knows your home will be on the market longer and they will have to spend more for advertising. It may be you do not even want your home on certain websites, so tell them that. If you are upfront about what you want when you are interviewing them, it will let them know what services that can deduct right away.
Prove To Them You Will Be A Great Client
Be your agent’s friend, not a tough customer. Let them know you are easy-going and tell them you will make sure your house is clean before showings and open houses. Overall, just maintain a good relationship and show them respect. Showing them respect right off the bat will increase your chances of lowering their commission rate.
You may be on a tight budget too. Letting your real estate agent know that will help them understand your situation more. Understanding each other is important to making sure everything will run smoothly.
Understand your area and the marketing that you may or may not need to sell your home. Interview different agents until you get the answers you are looking for. They will let you know what needs to be done in order to sell your home, which will lead to how much they can negotiate with their commission.
You can read more about negotiating tips and watch a clip with Fivewalls agents discussing their view on the commission negotiating subject.