How do Realtors work?
A lot of first time home buyers/sellers have very little knowledge on how the process of hiring a Realtor works or what it costs. In most real estate transactions there are 2 realtors involved; buying realtor and selling realtor.
The buying Realtor represents the potential buyer. It is important to note that as a buyer, if you use a Realtor, it costs you absolutely nothing for this service! All commissions are paid by the seller. Even if you look at 100 houses and in the end you decide not to buy anything, it costs you nothing as your Realtor will only get paid by the seller if you buy something.
The role that a buying Realtor will/can provide are endless, but in short form this is typically how it goes down:
I sit down with my potential home buyers and make a list of dreams, wants and desire. I use this information to compile a search engine and search every house that is on the market finding potential matches. We then arrange showings and look to find the perfect house. Then we write a purchase contract negotiating things like price, possession date, conditions. Once a contract is accepted we work to get conditions removed (ie.financing, home inspections). If this is all completed we send all the information off to the lawyer, the homebuyer meets with the lawyer to sign it off, meets with the Realtor again on possession day and do a walk through to make sure everything is the same and then you enjoy your new home!!
If only it was that easy – there is always a lot more to it, and always a few bumps in the road, but this is it in its simplest form.
As a selling Realtor, the process looks more like this:
Meet with potential home buyers and discuss the wants and desires of the seller. Compile this and write in a contract with commissions. The seller will have to pay both buying and selling Realtor commissions, which is typically 7% on the first 100k and 3% on the remaining balance. (ex. $300,000 house costs 7,000+6000+GST = $13650). Once the contract is signed, house is made to look its best, pictures taken, keybox arranged, and house is put on the MLS system for everyone to see. Showings arranged, property is advertised, someone makes an offer, contract is negotiated and signed and possession day is set. Again – Both Realtors only get paid if the house is actually sold, so if your home doesnt sell, you dont pay anyone.
This is more the process of the role Realtors play. In an upcoming blog I will explain more the advantages of having a Realtor vs doing it on your own.
If you have a little time and want to do some more research, I recommend the website http://www.howrealtorshelp.ca/ which should answer most of your questions. If you still have any questions regarding this, give me a call or send me an email and I would love to clarify it for you.
