A few weeks ago, we explored the different types of real estate commission models in Ontario, from the For-Sale-By-Owner, to the discount brokerage to the full-service agent.
At the BREL team, we believe our full-service and all-inclusive commission approach is best for our Sellers – but it comes at a price.
We’re often approached by potential Sellers who see the benefits of our full range of listing services, but want them at a discounted commission.
They want our home prep, cleaning and professional staging; they want our photography and professionally copywritten and designed marketing; they want the marketing exposure we get on our website and on social media; they want the seamless BREL process that aims to make selling as pain-free as possible; they want to work with a top agent with top negotiating skills.
But they want it all for a discount price.
When I buy a car, I’d love to pay the price of a Fiat and get the style, speed, power and performance of an Audi – but it doesn’t work that way.
In fact, I’ve owned both a Fiat and an Audi, and the experiences were just as different as the prices I paid.
- I love my Fiat! But it’s loud and the ride is bumpy. My friends don’t want to sit in the little backseat and it takes forever to gain any speed (especially if I’m doing something crazy like going up a hill). My Fiat isn’t as reliable as my Audi was, and little things sometimes break for no apparent reason. It doesn’t have the conveniences and extras that my Audi had either: GPS, assisted parking, heated back seats and a killer sound system.
- My Audi, on the other hand, was a far more comfortable drive. It was fast, got great gas mileage, had a better warranty and a superior safety record. I liked the luxury features and extras of my Audi. The experience at the dealership – both while buying it and getting it serviced afterwards – was completely opposite to my experience with Fiat too. At Audi, I felt like the salesperson genuinely cared that I was buying the right car for me – and they cared that I was happy after I took it home too.
It costs more to manufacture and service an Audi than a Fiat and the extra features and experience are worked into the price.
It’s the same in real estate.
The REALTOR you choose to hire has a direct impact on how much you sell your home for – and the experience you have while selling. Their knowledge, expertise and guidance directly impacts:
- How your home ‘shows’ to potential Buyers (impacted by how clean your home is, how it’s been prepared for sale and whether or not it’s staged)
- How many people see it (which depends on how your agent markets your home)
- How it’s priced and whether that helps or hinders the sale
- How the offer is negotiated (and the extent to which your interests are protected)
Top full-service agents don’t compete on commission – they compete on service, experience and results. They invest in the things they know influence how fast and how much a home sells for, which directly impacts how much money a Seller is left with after the sale. While the upfront fee of a full-service agent is higher, if you’re working with a top agent, that should translate into getting a higher price for your home and make up for any difference in commission.
If a Seller ‘saves’ $5,000 on commission by hiring a discount agent, but misses out on selling their home for $25,000 more because it wasn’t staged, their agent didn’t market it beyond the MLS and it was poorly negotiated, did the Seller really ‘save’ anything? Or did they lose out on $20,000?
Like most things in life, in real estate, you get what you pay for.