Real estate commission is one of the most controversial topics out there – everyone has an opinion (and it’s usually that Realtors get paid too much). What better to blog about then the truth about commission?
Home sellers in Toronto have an increasing variety of service and commission options to choose from. Each option comes with different service, skill, strategy and inclusive services.
Full disclosure: Our brokerage is a full-service brokerage, meaning we don’t offer our clients piecemeal versions of the real estate experience; we strive to be trusted real estate consultants who provide FULL service throughout the entire home buying or selling process.
Even more full disclosure: the BREL team (that’s us) goes one step further with the full service business model – we provide an all-inclusive package of benefits and services to our clients; in addition to providing experience, expertise and strategy, we pay for professional photography and advertising, pre-home inspections, staging consultations and a whole slew of other potential services depending on the needs of the listing.
So…as a Seller, what are you REALLY paying for and where does the money go?
Commission: $30,000 + HST
Brokerage representing the Buyer: $15,000
Fees to Listing Realtor’s Brokerage*: $4,500
Hard Costs to Sell the Home: $1,000-2,500 (professional photography, advertising, home inspections, cleaning, etc.)
Operating Expenses: $1,500 (realtor licenses/fees, car/gas/parking, training, technology, etc.)
Net Income : $3,500-$5,000
* Every Realtor has a separate arrangement with their brokerage re: how they split commissions-anywhere from 10-50%. For this example we assumed the Realtor pays 30% of gross commissions to their brokerage, our current split.
This blog isn’t about trying to defend how much money Realtors make, so I won’t go on and on about the risks we take (we only get paid IF our clients buy or sell) or the number of hours we work that aren’t directly related to a specific client and I certainly won’t lament about the fact that we work every evening and weekend and miss Thanksgiving dinner every year. Sorry, I couldn’t resist.
The point is...buying or selling can be expensive, and our clients deserve to know how we spend that money. Like in most everything else in this world, you get what you pay for. More on that our blog – Why Toronto Realtors Aren’t Created Equal.