With misconceptions about Realtors‘ commissions affecting how people feel about buying or selling a home on their own, the Ontario Real Estate Association (OREA) wants to advise consumers that Realtors‘ commissions and contracts are negotiable—and always have been.
"Correcting misconceptions about commissions is something that is very common for Realtors," says Barbara Sukkau, president of the Ontario Real Estate Association. "A Realtor‘s commission isn‘t set in stone, it is agreed upon by the client and Realtor in the Buyer Representation Agreement or Listing Agreement."
"Whether a client is a first time or experienced home buyer, part of finding the right Realtor is looking for one who asks the right questions, gets to know their finances and demonstrates expert knowledge of current market trends. It also means settling on a commission that works for everyone," Sukkau says.
When a potential buyer starts working with a Realtor they can sign a Buyer Representation Agreement (BRA). This contract establishes how long the buyer and Realtor will work together, what neighbourhoods the contract applies to and is where the Realtor and client will decide on a commission.
For sellers, the contract is called the Listing Agreement. The document provides a Realtor with authority to offer for sale and market the home; it establishes the listing price, length of contract and also the Realtor‘s commission.
A Realtor‘s commission is either a percentage of the sale price, or a previously agreed specific amount, but it cannot be a combination of the two. Commission guidelines are generally established by brokerages and then an exact number is agreed upon between a Realtor and their client.
"We know that owning a home is important to Ontarians, and we want to help them get the home of their dreams," says Sukkau. "We want our clients to be happy, and the Buyer Representation or Listing Agreement is our promise to work hard on their behalf."
Sukkau suggests that potential clients do their research and interview a number of Realtors. "They‘ll want to find a Realtor who makes them feel comfortable, presents him or herself professionally and has a plan that is built around their needs," she says.
Both buyers and sellers should ask questions about the agreements they‘re signing and talk to a Realtor about these details:
- Length of contract: How long will you be working together and what regions does the contract cover?
- Value: A seller‘s Realtor can complete a market value assessment and advise on a listing price. A buyer‘s Realtor will help them find a home in their price range and make sure to consider their list of 'must have features' in their home.
- Representation: Services offered by a Realtor can vary, so it is important for a buyer or seller to agree with their Realtor on how they are going to work together to either find the right home or sell their home for the best price possible.
Visit www.howrealtorshelp.ca for more information on working with a Realtor. To learn more about the Buyer Representation Agreement, visit www.youtube.com/OREAinfo.
About the Ontario Real Estate Association
The Ontario Real Estate Association represents 50,000 brokers and salespeople who are members of the 42 real estate boards throughout the province. OREA serves its REALTOR® members through a wide variety of professional publications, educational programs, advocacy, and other services. OREA.com