Dear David: What is the normal real estate commission charge for selling a home? I noticed a Toronto real estate agent who was offering to sell a property for a flat fee of $5,900. My last recollection is that the normal rate is/was five percent of the selling price. Thanks for your help. – THE COMMISSIONER
DEAR COMMISSIONER: Real estate commission is negotiable, not set. That said, certain fee ranges have become customary in the industry, depending on the region and level of service. There are hundreds of comparisons we could make to illustrate this point, but I’ll use car cleaning as an example.
Let’s say you own a $750,000 Ferrari (which seems fitting, since your home is your largest asset). You can wash that Ferrari in your driveway, take it to the manual spray wash, or run it through the car wash (ouch). You can send it to a local clean-up shop, or book a bumper-to-bumper detailing package so that nothing is overlooked.
Any of these options will give you a cleaner car, but the range of service and the results you can expect may vary greatly from one choice to the next.
Selling your home is similar. The “do-it-yourself” model has always been available and accessible. You can purchase a For Sale sign at your local hardware store, stick it in your lawn, and sell to whoever knocks on your door. You can get a fancier version of the sign from a discount brokerage, who may market themselves as a fixed-fee company. DIY methods have been around for longer than the full-service brokerage approach, but these days, they make up a very, very small segment of the market.
A home is a huge investment. For that reason, most owners tend to enlist the help of a full-service type of brokerage. There are an infinite number of business models within this category. Some merely post your listing on the MLS system, take photos on their phone, and stick a sign on your lawn. Others prepare your home for sale with the care and attention of a bumper-to-bumper detailing package. This may include landscaping, cleaning, staging and professional photography to ensure your home is showcased in the best possible light.
Every kind of wash cleans your car, and every house sells. In both cases, results can vary dramatically depending on the time, effort and resources invested in getting the job done.
PRO TIP: Why use a full-service agent? I often tell sellers that when they list a property on the MLS system, they are hiring over 90 thousand licensed Ontario Realtors to sell their home, but only paying real estate commission to the one who brings the best offer. That’s the beauty of using the MLS system as opposed to a sign from the hardware store – you’re hiring tens of thousands of professionals and paying just one.
David is a top local Realtor who makes the time to help you personally when selling or buying your home. Moving? Get it right. Speak to David today! Call or text 519-577-1212.