Realtor Commissions
Alot of people I come across are unaware of how exactly Realtors work. Most are shocked to learn that using a Realtor when buying a place is generally free. In this case, there is really no downside to using a Realtor when buying a home. The way we get paid is through the seller. When listing your home, you will actually be paying 2 realtor fees- one for the selling Realtor and one from the buying Realtor.
Typically we use a 7% + 3% method to calculate our commissions. That meaning it will cost you 7% on the first $100,000 and 3% on the remaining balance. Keep in mind that this is then split between both Realtors, each receiving 3.5% and 1.5%.
As an example:
A sale price of $300,000 on a condo would result in:
3.5% on first $100,000 + 1.5% on remaining balance for listing Realtor = $3500+$3000= $6500 + GST
3.5% on first $100,000 + 1.5% on remaining balance for buying Realtor = $3500+$3000= $6500 + GST
TOTAL = $13,000 + GST
That may seem like a lot, but generally speaking listing through an accredited Realtor typically gets you a sale price higher than the cost of the Realtor fees than if you were to decide to list on your own. In addition, you will have exposure to many more prospective buyers, often reducing the time to sell by a substantial amount. Any time you work with a Realtor it is important to be up front and discuss what fees are involved so there are no surprises later.
