How to choose a Low Commission Rate (One Percent Commission Rate) Real Estate Agent | MLS® REALTOR® | St. Catharines Ontario |
When choosing any REALTOR® to sell your home, be it a low commission rate REALTOR®, a one percent commission rate REALTOR® or a high commission rate REALTOR®; make sure he/she is an experienced, qualified, Full-Time REALTOR® who will place your home on the local MLS® and on Realtor.ca. The MLS® exposure is one of the most important tools that REALTORS® have to sell your home.
Commission rates may vary from brokerage to brokerage. Therefore, in order to find a REALTOR® that will provide the MLS® Listing exposure that you want AND a low commission rate, you’ll need to find a REALTOR® who is prepared to take a very small commission amount for himself/herself as a Listing Commission AND provide a comparable Selling Brokerage Commission to the Buyer’s REALTOR®.
When negotiating for your best commission rate, simply ask the REALTOR® what his/her best TOTAL Commission rate will be for selling your home. Make sure that you negotiate the TOTAL Commission rate not just the Listing Commission Rate. Make sure that the Total Commission rate that you are negotiating will include both the listing brokerage commission and the selling brokerage commission. The selling brokerage commission is the commission paid (from the Total Commission) to the buyers brokerage (the brokerage that brings the offer and the buyers). You’ll want to compare the Total Commission of a number of REALTORS® as well as the service, experience and knowledge of these various REALTORS®. Then, choose the one that best suits your needs.
You don’t need to get caught up with the colour of the sign on your lawn or with which REALTOR® sends you magnets for your fridge every month. Your search for a good REALTOR® just needs to consider what experience the REALTOR® has to offer, his/her qualifications , whether the REALTOR® is a Full-Time real estate professional and will be committed to working on selling your property Full-time and not as a hobby AND the TOTAL COMMISSION that you’ll have to pay for his/her REALTOR® Services. Remember also that it is important to use a low commission REALTOR® that has experience at selling homes using a low commission approach.
A traditional commission REALTOR® may sometimes give a low commission on a one-off basis to simply compete with a low commission brokerage. But, you must consider if the traditional brokerage will have the experience to know how to sell homes using the low commission approach. The low commission REALTOR® must be willing and able to take a much lower Total Commission than the traditional REALTOR® that charges a traditional commission rate. The REALTOR® that uses a low commission strategy with all Listings and has the proven results and experience with the low commission approach will best be able to employ this type of strategy.
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Below are some additional tips about choosing a REALTOR® as described by Fabrice Taylor and Published in The Globe and Mail as a Special Report (Published Tuesday, Mar. 13 2012).
Fabrice Taylor writes about investing in Report on Business.
People spend more time shopping for a TV than for a real estate agent. This, sadly, can cost them thousands of dollars, and often does.
When house prices are surging and a modest home can cost $600,000, excitement can lead to indifference about what agents charge. But that’s a mistake under any circumstance. Homeowners who understand how the realty business works, which this little primer will attempt to explain, will be far better off.
Don’t hire a friend
The easiest mistake is hiring an agent simply because you know him or her – it’s a friend, a second cousin or just an acquaintance. You might not even want to hire that person, but it’s awkward to say no, or to haggle.
A friend of mine who wanted to sell his house hired his childhood pal because he pressed him for the listing. The agent sold the house in two days, which my friend at first thought was great work. When he discovered it sold fast because it was very underpriced, he had second thoughts. He paid $22,000 for this “service.”
Takeaway tip: Make your agent earn your business whether you know him or not.
Myth: You get what you pay for
Most people think commission rates are high but accept them anyway. There are full-service discount realtors who charge less and offer the same service. Why hasn’t this caught on faster?
Some homeowners are convinced by the industry that “you get what you pay for.” That’s what traditional agents always say. But it’s clearly not true. Are agents working twice as hard today as they were 10 or 15 years ago? Obviously not, yet commissions have doubled in that time along with home prices. Rates vary by province but assuming a 5-per-cent commission, the cost of selling an average-priced house in Toronto is $25,000 today compared, with half that a decade or so ago.
If you got what you paid for, they’d be working two times harder right? In fact, technology – Internet, smartphones, iPads – has made their jobs a lot easier. Commissions are too high in many cases. But what’s the right number? Is it 1 per cent? Or 3 per cent?
Takeaway tip: You should always negotiate the commission. Before you even let an agent in your door, ask them what they charge
How the realty industry operates
Before answering the 1 per cent or 3 per cent question above, you have to understand how the industry works. Agents who work for big-name firms have to charge a lot because they’re charged big fees, as much as $2,000 a month. It’s not that agents are greedy; it’s that big firms are charging them through the nose.
Takeaway tip: Avoid agents with big overheads; they’re more likely to be desperate to generate a quick commission to pay their bills, even if it’s at your expense.
Final takeaway tip: Do your homework and shop around. It may be old-school advice, but it’s so worth it.
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For more information or details about our commission rates and real estate services visit www.coronarealty.ca or contact Corona Realty Inc., Brokerage at (905) 525-3311