It’s unfortunate but true; too often, home sellers are not aware of exactly how much commission they pay out when they sell their home through a traditional real estate agent.
Here is how real estate agents’ commissions typically break down, by province.
Real estate agent commission percentages by province
• British Columbia = 7/3% (7% on the first $100,000, 3% on the remaining amount)
• Alberta = 7/3%
• Saskatchewan = 5%
• Manitoba = 5%
• Ontario = 5%
• Quebec = 5%
• New Brunswick = 5%
• Nova Scotia = 5%
• Prince Edward Island = 5%
• Newfoundland = 5%
This commission is usually split between the home seller’s real estate agent and the home buyer’s real estate agent, but the entire amount comes out of the pocket of the home seller.
How much commission does a buyer’s agent make?
So if you have a $400,000 home, you are essentially paying your real estate agent $8,000 and the buyer’s agent $8,000, for a total of $16,000 if you live in British Columbia or Alberta. That works out to $10,000 each, for a total of $20,000, if you live in the rest of the Canadian provinces.
For most home sellers, this is a lot of money that they would prefer not to give up, especially considering that this could be a part of a sizable down payment on a new home. Or a five-star trip to Turks and Caicos.
The big dilemma comes when home sellers who opt to forgo paying a commission to a seller’s agent are then faced with a buyer’s agent who wants their commission. Obviously, it is in a home seller’s best interest to offer some kind of commission, whether it be a dollar amount or a percentage of the selling price.
How much would you offer in buyer’s agent commissions?
Indeed, some home sellers wonder if they will be able to sell their homes quickly if they do not offer a high buyer’s agent commission. The truth is, real estate agents must work with their client’s best interest in mind; not the commissions they stand to make. That said, they must show buyers the homes for sale that fit their criteria. Otherwise, they stand to lose potential clients via dissatisfied clients and bad word of mouth in the future.
Honest and ethical real estate agents are driven by their need to find their clients the right home; they are well aware that a happy client makes the best referral.
Homebuyers are shopping alongside buyer’s agents
Besides, nowadays, homebuyers, more often than not, are shopping for the homes they want anyway and they tell their buyer’s agent which homes they want to see. They know what they want in a home and their decision has nothing to do with how much commission you are offering to a buyer’s agent.
A buyer’s agent commission is not the key to selling your home. In fact, the right price, great staging and the ability to promote the location you’re in will usually lead to a successful sale in a short amount of time.
If you’re ready to buy or sell a home, visit ComFree.com today.