Is Your Realtor Steering You Away From 1% Commissions?
Published on 29 August 2022, 07:22:56 AM
You heard you can save on realtor commissions using discount brokers. But using a 1% commission brokerage doesn’t seem to be working out at all. You’re just not getting the buying traffic you think you should. What’s going on?
CBC Marketplace asked that question too. What they found is an Ontario industry-wide practice: realtors steering you away from 1% commissions. It’s intended to increase realtor commissions, and improve realtors’ profits at your expense.
Now that can’t be right.
Selling Your Home and Realtor Commissions
Here’s why you need to be concerned about a realtor steering you away from 1% commissions.
You decide to market your condo in a prime Greater Toronto Area suburb. Selling should be no problem.
Still, you’d like to shave a bit off realtor commissions. So you pay a small fee to a discount real estate brokerage to list your investment condo on the MLS. Having no real estate agent means not paying a standard 2.5% realtor commission (Toronto rates). Instead, you do all the work yourself, from posting for sale signs to illuminating buyers on the selling features of your home.
What to look for in buyers’ offers.
Oddly enough, although your newer condo is in a great neighbourhood and priced competitively, showings are slow to materialize. Real estate agents aren’t calling with clients who want to tour your home, and almost none come to the open houses you so graciously host.
Could it be a realtor steering you away from 1% commissions?
What is Considered Steering in Real Estate
CBC Marketplace had a similar experience when its reporters started asking about the real estate commission in Ontario.
They confirmed the practice of a realtor steering you away from 1% commissions was shared by many sellers. Real estate agents deliberately steered potential buyers away from homes listed by 1% commission brokerages. Buyers were told homes were overpriced, sellers weren’t willing to negotiate, or showings couldn’t be arranged. Some were even told homes had renters, making arranging viewings cumbersome.
Working with a realtor in Ontario — realtor duties to client.
But that just wasn’t the case and, as Marketplace discovered, home sellers were frequently not even contacted by agents intent on getting standard realtor commissions. Those agents who did phone sellers walked away when they were offered a 1% commission. As it turns out, you aren’t the only Ontario seller with a realtor steering you away from 1% commissions.
Do Realtors Ever Lower Their Commissions?
What many sellers, and buyers, don’t realize is they have the power to set realtor commissions. RECO, the Real Estate Council of Ontario, gives sellers complete discretion over what they offer a real estate agent. You can negotiate whatever real estate commission Ontario agents are prepared to accept. In fact, a realtor steering you away from 1% commissions is crossing the line. We tell you why shortly.
Three Ways to Calculate Realtor Commissions
Sellers can offer Ontario realtor commissions based on:
- A fixed amount.
- Percentage of sales price.
- Combination of fixed amount and percentage.
How much do realtors make, by the way? An industry insider estimates, after fees and expenses, a realtor selling 10 homes a year and charging a standard 5% commission nets around $72,171 a year. 1% commission realtors make up for their lower fee by taking on more clients, and streamlining or automating their work.
Can you keep the deposit if financing falls through?
Stop a Realtor Steering You Away From 1% Commissions
A realtor steering you away from 1% commissions has committed an illegal act, according to RECO. The industry has been warned steering is illegal, and breaches real estate agents’ code of ethics under the Real Estate and Business Brokers Act, 2002. Their licences could be revoked, and agents fined up to $50,000 (up to $100,000 for brokerages).
Understand Realtors Commissions Before You Sign
Before you consider working with a realtor in Ontario, read these rules about realtor commissions.
Why You Need a Real Estate Lawyer in Ontario
You’re keen to save money. Instead of paying a traditional law firm to close your next real estate transaction, now you can access a lawyer for low, flat fee rates. Axess Law provides only the legal services you need, for a lot less than other real estate lawyers.
We have virtual real estate lawyers throughout Ontario who can review your agreement of purchase and sale, and advise on matters such as is your seller’s right to keep the deposit protected? Our licensed legal professionals can add essential clauses that compensate you for lost costs like moving expenses if a buyer attempts to walk away without your mutual agreement.
Questions to ask lawyers when selling your home.
Axess Law negotiates with the buyers’ lawyers if they need more time to close the deal, or the buyer refuses to complete a home sales transaction to your satisfaction. Amending an agreement of purchase and sale takes minutes when Axess Law works with you to fix last-minute issues that threaten to block or delay a home sale.
We search title to your property to verify it is free of construction liens or financial encumbrances, and transfer your home to a new buyer by your agreed-to deadlines. Our virtual real estate lawyers can discharge mortgage obligations so you can move on to your new home, or follow mortgage lenders’ directions to arrange new financing when you need it.
Real estate lawyer services and what they cost in Ontario.
Flat Rate Legal Services When You Need Them
Live a long ways from an Axess Law office? Our experienced virtual real estate lawyers connect with you by remote video conference call to discuss offers to purchase, and close sales you arrange. A smart phone, tablet, laptop, home computer, or almost any mobile device is all you need.
Your Axess Law lawyer walks you through e-signing real estate transactions remotely. Your e-signature is obtained using only secure, confidential software platforms. We courier documents to your location if you prefer, or you can drop into any Axess Law location to sign, any time that’s convenient for you.
Using virtual real estate lawyers to e-sign documents.
Flat Fee Real Estate Lawyers Near You
Axess Law has real estate lawyers you can afford, from $799.99 and up plus HST to sell an Ontario home or land, or $999.99 and up plus HST for buyers. Arrange joint tenancy for matrimonial homes with a spouse, or add names to a house title in Ontario for $649.99 and up plus HST. Axess Law has real estate lawyers (Toronto, Greater Toronto Area or Ottawa) near you, day or evening, or we arrange remote video conference calls at your convenience.
Book Online or Phone Appointments in Minutes
It only takes a few minutes of your time to book using our easy online form. Or dial our 1-647-479-0118 lawyer line (toll free to 1-877-402-4277) to reserve appointment times that work for your schedule. Our lawyers are available 7 days a week, anywhere in Ontario.
Call and tell us your location. A virtual real estate lawyer will connect with you, or you can drop into the nearest Axess Law location to arrange an appointment time. We have onsite parking, and easy transit access.
