THE TRUTH ABOUT REAL ESTATE AGENTS COMMISSIONS – ARE THEY WORTH PAYING?

For most home sellers, the biggest question on their mind is how much the real estate agent will charge as commission.  This is understandable because it is a big expense. If the seller is planning on buying another house, the commission will take a huge chunk of their budget.

As a property owner, you need to make sure your property will sell for the highest price possible at the soonest possible time. This is where a good real estate agent can help.

Where does the commission go and what do you get in return for your money?

Below is an overview of commission and fee structures of real estate agents and what you can expect to get for your money.

SERVICES INCLUDED IN A REAL ESTATE AGENT’S COMMISSION

A real estate agent’s commission is the most standard fee you will likely have to pay.  In Canada, real estate commissions may vary by province.  In Quebec and Ontario, the standard rate is around 4-6% of the sale price.

This commission is sometimes split between the home seller’s real estate agent and the buyer’s real estate agent.  However, the entire amount is paid by the home seller.

Rather than worrying about the cost of the commission, you must ask what you can expect to receive from your real estate agent in exchange for the commission.

The following are services a good real estate agent provides:

• Top priority and attention to the property you are selling
• Work on your behalf to obtain the highest possible selling price
• Regular and timely communication with you and active follow-up of every lead
• Recommendations on how to increase the value of your property

Some agents may charge a lower commission but they may not be the best agent to help you sell your property.  Well-established agents have a good reputation and have earned clients through hard work and word of mouth.  Their ability to sell your property for the right price is based on a thorough knowledge of the industry and their vast connections.

Buyers don’t pay any commission to their agents.  Their fees also come from the commission paid by the seller to their agent.

What are other real estate agent fees?

An additional fee you may pay a real estate agent is for advertising and marketing.  It could run up to 1% of your property’s value.  Is it really worth spending thousands on marketing activities to sell a $500,000 property?  In many cases, it may be a small price to pay for something that could reap big dividends.

Depending on your choice of real estate agent, marketing fees may be charged for the following:

• Signage
• Brochures or flyers
• Internet advertising
• Newspaper advertising
• Real estate magazine ads

HUGE PAY OFF WITH ONLINE REAL ESTATE MARKETING

You may not want to spend a lot on advertising but you can definitely get a wider reach with an online marketing campaign. While internet marketing can be expensive, it also offers the greatest ROI.

It is advisable to sign up with a real estate agent that has a website. Millions of people browse real estate listings online so this means more potential buyers for your property.

You have the option to accept or decline any form of advertising.  Good real estate agents will make sure to discuss the best options with you.

Fees and commissions may seem expensive but they are worth paying for if you have a reputable real estate agent who will work hard on selling your house for the best possible price.

ARE REAL ESTATE AGENT COMMISSIONS NEGOTIABLE?

When you start comparing real estate agents for your project, you may feel confused about their varying fees and commissions.  Are these fees negotiable?

Real estate agents are competitive because they want to get your business.  It is important, however, to understand what each one offers.  Be ready to ask the right questions when you interview potential agents.

If you choose the lowest commission and fees you can find, you might be able to save on a few thousand dollars.  However, you risk losing much more if your property sells for $25,000 less.  Your property could also stay longer in the market.

It is important to get information from at least 3 real estate agents in your area to compare their strategy and see if you get along with them.  In comparing commission rates, check if it includes some advertising and what channels they plan to use.

To ensure that your property sells for the highest price possible and as quickly as possible, you need to find the best real estate agent for the job.

We can help you to find the right real estate agent from our vast network of real estate professionals in Quebec.  You can choose from over 170 qualified and licensed real estate agents. It is easy, quick, and absolutely free.