By Jody Thompson
Real Estate commissions are one of the biggest expenses of selling your home. More often than not, this expense is poorly explained by your agent or not well understood by home owners. So how does it really work?
Most agents will recommend that you list your home on MLS. MLS allows other agents with potential buyers to show and sell your home. Both the listing agent and the buyers (cooperating) agent get paid.
The buyers agent typically gets paid 2.5% of the selling price of your home.
The listing agent can charge you whatever they want and the fee often depends on the services that they are offering you. For example, you often hear agents advertising that they only charge 1%. In fact you are paying the 2.5% to the buyers agents plus the 1% to the listing agent or 3.5%.
If your agent is planning on putting a complete marketing program together for you to maximize your selling price they typically will charge you the same as the buyers agent or 2.5% for a total commission of 5%. The marketing program includes things such as hiring a professional photographer to take pictures, videos of your home, a dynamic advertising plan, as well as staging your home to show it at its best.
To sum it up, commissions typically vary from 3.5% – 5% and you typically get what you pay for. A few of my recent sales in Etobicoke where I offered my clients full service – de-cluttering, staging, an aggressive advertising campaign to promote the property, professional open houses resulted in them getting $70,000-$100,000 over list. My clients would say that the little extra they paid in fees was well worth it. It’s important to ask any potential agent their fee, as well as thoroughly understand the services that are included in that fee.
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