Real Estate Information

If you’ve ever sold a property through a real estate agent, you know what it’s like to feel hosed.  In Canada, total commission rates generally range from 4-6% of the final sale price.  On a $450,000 property, that comes out to between $18,000-$27,000, BEFORE taxes get added.  In some provinces you’ll pay the Goods and Services Tax (GST) on top of the commission. In other provinces with a Harmonized Sales Tax (HST), the full amount of the commission will be taxable at the combined provincial and federal rates.  Gulp!

Who pays this commission? YOU, the seller, of course!  If you’re tired of shelling out so agents can roll around in luxury cars, with expensive suits and perma-tans, then read on.

The problem with our current system is that agents are motivated to complete transactions, not necessarily negotiate a transaction that is in their client’s best interests.  They get paid when the deal closes.  A few thousand or even tens of thousands mean much less to them than the homeowner.

The book Freakonomics discussed a study in Chicago that showed agents sell their own houses at prices about  three percent higher while sitting on the market an average of ten days longer.  In other words, they are willing to wait longer for a higher price.

So, even if you were willing to wait for a better price, your agent is motivated to sell NOW!  A decision by you to settle for $10,000 less only means $500 minus broker fees to them, and only $250 or less if they split the commission with a buyer’s agent.   For a seller, it could be a down payment for their next car.  For an agent, maybe the cost of a night out…

Real Estate Information
Real Estate Information
Real Estate Information
Real Estate Information
Real Estate Information

Real Estate Information

Real Estate Information