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What percentage or cut realtors get for selling your home or helping you buy your home?

Most Canadians use a real estate agent when buying a home, paying real estate agent commissions. A realtor can help purchasers find the right home for the right price and guide them through the entire home buying process.

Generally, buyers don’t pay realtors directly. Instead, their compensation comes in the form of a commission on the property’s final sale price. Commissions for both the buyer’s and seller’s agents are taken off the top of the proceeds of the sale. While this might create the impression that the seller pays for the services, making realtors “free” for buyers, that’s not the case.

So, how does a buyer know how much they’re paying a realtor, and is there any way to pay less? Here’s what you need to know about real estate commissions when buying a home in Canada.

How much are commission rates for real estate agents in Canada?

Commissions paid to real estate agents in Canada typically range between 3% to 7% of the final purchase price, depending on region and the agent used.

So, for example, commissions on a home that sells for about $500,000 — the average price in Canada — would total $15,000 to $35,000. This amount would be split between the buyer’s and seller’s agents.

A home in a pricier location such as Vancouver or Toronto, which may sell for $1 million or more, would have total commission fees starting at $30,000 to $70,000.

Is it really “free” to use a realtor when buying a home?

No, this is a common misconception because the fee is built-in to the transaction. The buyer actually pays for all the commission fees — both for their own agent and the seller’s agent — as these fees are worked in the home’s total purchase price. The buyer is the one who will be paying off those extra thousands of dollars (plus interest) over the next 25 years.

To fully understand how buyers are on the hook for realtors’ commissions, you need to look at the transaction from the perspective of the seller.

Sellers want to get as much money as they can from the sale of their home. If 1.5% to 3.5% of the purchase price is going toward the buyer’s agent, that’s thousands of dollars the sellers will never see. In other words, if sellers know that they can reduce or eliminate the amount of money they must pay to a buyer’s agent, they’ll be open to negotiating a lower sale price on the property.

Can I save money on commissions by using an online real estate brokerage?

It depends on the type of service you are looking for and the brokerage you choose. There are currently two main business models for real estate brokerages in Canada, as explained below.

Buy Before You Sell Brokerage

These types of real estate brokerages allows the seller to buy the home you love, now, and sell without the stress, later. Properly, which currently operates in Ottawa, and Toronto, is a good example. Sellers pay a service fee of  5%  of the sale price—which is in line with traditional realtor commissions—but this fee includes a home inspection, cleaning, professional photography, and staging.

The real advantage, however, comes from the speed and convenience of the sale. Sellers don’t have to stage their home or conduct showings themselves, instead Properly takes care of that. Properly then lists the home for sale, and if it doesn’t sell within 90 days, Properly buys your home for the guaranteed price. Sellers know in advance how much they’ll get for their home, which allows them to unlock equity to buy their next home without having to list or sell their current home first. As such, Properly can be a good choice for current homeowners who want a no-nonsense, timely transaction, but not necessarily at cost savings. Read our full Properly review for all the information.

Learn more about Properly

Fixed-Fee Service 

As the name implies, fixed-fee real estate brokerages charge a flat amount to sellers instead of a commission fee based on a percentage of the sale price. Purplebricks, for example, which currently operates in Alberta, Manitoba and Ontario, charges $2,500 to $3,000 for homeowners to list and sell their properties, regardless of the home’s value. Both buyers and sellers are assigned a realtor in their neighbourhood—so you still benefit from the expertise of a licensed professional.

Cost-wise, the flat-fee model is advantageous to both buyers and sellers, since it keeps more money in the seller’s pocket, but also eliminates the hefty real estate commission fees that can inflate a home’s purchase price for buyers. Furthermore, Purplebricks buyers get $2,000 cash back on their purchases.

Learn more about PurpleBricks

Buying a home without an agent

Of course, you can also buy or sell a home without using the services of a real estate agent or online brokerage, if you choose. While this may provide cost savings, there are also risks to be aware of. Just make sure to get a real estate lawyer on board.

Tips for buying a home without an agent

Get a pre-approved mortgage. You don’t want a sale to fall through because you couldn’t get your financing arranged in time. Contact your bank or mortgage broker well in advance of making an offer to get pre-approved for a fixed or variable rate mortgage.

Do your research. Without the expertise of a realtor, you’ll need to brush up on the ins and outs of buying a home to ensure your purchase goes smoothly and you avoid any unexpected fees at closing. You should also research details that are particular to the neighbourhoods you are looking in, such as previous sale prices, typical closing periods, and if winning offers tend to be conditional or unconditional (more on this below).

Obtain legal advice. A home purchase involves contracts, title searches and other legal documents. Even if you decide to go without a realtor, you should still hire a real estate lawyer.

The risks of buying a home without an agent

  • Sales data is currently hard to come by. To negotiate effectively, you need to know how much comparable homes in the neighbourhood have sold for. (List prices aren’t much help since many homes sell for tens or even hundreds of thousands of dollars over asking.) Right now, realtors are the only ones who have easy access to this information online. But this is expected to change soon in Toronto and other regions in Canada, as the Toronto Real Estate Board recently lost an appeal to restrict such information.
  • Not everyone is a good negotiator. And even if you are, you probably haven’t negotiated many home sales. An experienced realtor, on the other hand, has done this very thing dozens or even hundreds of times before and has a sense of what works and what doesn’t.
  • You don’t know what you don’t know. A realtor knows the red flags to look for regarding potential problems (such as wet basements or mould) and is aware of all the disclosures a seller must provide. If you go it alone, you may not know what to ask or what you are legally entitled to.

What are the potential savings for buyers who don’t use an agent?

Say you’re buying a home in a neighbourhood where properties typically go for $800,000. Let’s assume commissions in this case total 5%, or 2.5% to the buyer’s agent (if you use one) and 2.5% to the seller’s agent. That’s $20,000 each, or a total of $40,000 in commissions. The seller would clear $760,000 from the sale ($800,000 sale price – $40,000 commissions).

If you decide not to use a realtor and explain this to the listing agent, you could put in a bid of $790,000 instead of the typical $800,000 and still win the sale. How so? The seller’s realtor should have no issue with the lower price since he or she will still receive about the same commission ($19,750 instead of $20,000). The seller, however, will clear $770,250 in the transaction ($790,000 sale price -$19,750 commissions), or $10,250 more than they would receive in the first scenario.

In this example, you save $10,000 off the purchase price (and thousands more in interest over the life of your mortgage) by not using an agent.

How to save money on real estate agent commission 

There are a few options available to buyers who want to save money on real estate commissions.

  • Negotiate a lower commission. While most home buyers understand they should be negotiating with lenders to get the best mortgage rates possible, many aren’t aware they can also negotiate commission fees with realtors. For example, if agents in your neighbourhood usually charge 3%, see if you can negotiate down to 2% instead.
  • Use an online real estate brokerage. Purple Bricks, for example, recently began operations in four Canadian provinces (Alberta, B.C., Manitoba and Ontario). Buyers are assigned a realtor in their neighbourhood and receive $2,000 cash back on their purchases, while sellers pay a flat fee of about $800 instead of a commission. Similarly, Moncton, NB-based Property Guys avoids commissions as homes listed on the site are for sale privately — meaning there’s no listing agent — for a flat fee. Buyers deal directly with the seller.
  • Buy a home on your own. If you’re looking for even greater savings, you could find and buy a home on your own without hiring a discount brokerage or buyer’s agent. Websites such as Realtor.ca, the Multiple Listing Service website run by the Canadian Real Estate Association, and Zillow, a U.S. website and mobile app, allow you to search for Canadian properties by postal code, city or province.

The Bottom Line

Buyers who use a real estate agent do pay indirectly for the expertise that a professional provides. But they can reduce the amount they pay by negotiating a lower commission with their agent, using a discount real estate brokerage, or forgoing the services of a realtor entirely if they feel comfortable going it alone.

Article comments

Ms Stephens says:

My real estate agent said the other buyer and realtor is needing 3000 in closing costs for their loan and 500 warranty plus i have to pay for 3000 plumbing issue. They never raised the listing price in my best interest.

Kim says:

If a realtor get referral agreement from receiving brokerage and it says
Xyz realtor will receive 2% commission of net of sale price..
Does it mean 2% of commision that receing brokerage will get
It means 2% of net of sale pric??

Frances Corry says:

after a real estate agent’s contract is up, can they still collect a commission , if so , for how long?

Lisa Jackson says:

Hi Frances,

It depends. Does your contract have a holdover clause? More info here:


I would suggest speaking with your agent and clarifying the contractual agreement. If not, you may want to consult a real estate lawyer. Good luck!

Carter says:

Got paid for deposit on my home I sold ( non refundable) buyer wants to back out of deal, do I still pay commission to real estate agent if I don’t receive the balance of money

Robb Engen says:

Hi Carter, you shouldn’t have to pay commission on a non-refundable deposit. The real estate agent gets paid to sell your house.

Iryna says:

Honestly, that was me 2 years ago complaining to my friend, who is a real estate agent, about the high commissions, and how the price for the houses increased and the commission hasn’t changed. 2 years after that, with visiting houses with my friend, around 5 offers behind, and nothing bought/sold so far, I can see why they get paid for what they do. You work weird hours (touring the house after 9pm, weekend), negotiate the offer with other realtors, sometimes not very polite and rude, numerous conversations over the phone. Overall quite stressfull job with high risks, cause people are different and situations are different too. And no earning from some clients (like us) for 2 years.

MoneyMaker says:

Like all other professions, investing in real estate also demands proper research, planning, and a properly devised strategy. The basic and most important thing is you must be aware of what you are doing and what you want to achieve.

Lisa Jackson says:

Well said!

Rentwell says:

It was a nice thought to share tips as well as risks related to real estate agent with us. That will give people the opportunity think on both sides and choose for themselves(in their own risk). In my personal opinion going with someone who have the proper knowledge and experience in the field is a best choice. But one should be careful before taking their pick.

Kerrie Laycock says:

I have been house hunting and have found that the realtors are useless! They do not point out mold or other issues. I was the one who found all the issues and the realtors actually argued with me. Black mold is black mold under the sink and a wet wall in the basement is just that wet. When I call then to explain I am out of town all they say is call me and I can drive you around and show you some houses. No one talks to find out what I am looking for or needing. And when they hear it is in the lower end of things they do the oh I will set you up on line. No one has even gone out of their way to help me to find a home or help with information on the town I am moving to. The realtor who is selling my house told me to not say any thing to any one about what is wrong with the place because its up to their inspector to find it. I have zero respect for this profession! they are a sleazy as a car sales man. And now with the internet they are lazy and let the customer do all the work of finding the home they just open the door with the key. Also they do not really help to negotiate a lower price because it cuts in to their commission. I wish some one could shin a light to how ass backwards that whole industry is. ONLY the realtors say you need one.

David says:

Right on the money!

Rae says:

Absolutely true and more. Contrary to the ads, real estate agents aren’t incentivized to help you be an aware buyer, they are incentivized to hide problems and make a sale as quick as possible. They have a lot of lines that you will hear over and over like “as a buyer, you don’t pay” which anybody who is savvy knows are sleazy sales tricks. Some in the industry say that some agents start out honest, but the industry teaches them to be dishonest. The honest ones don’t survive. And they violate anti-trust laws each and every day by colluding to thwart private sellers and buyers. I hope the industry changes soon, it’s long overdue.

steve onsorge says:

Hi Kerrie,
I am an agent and I can validate your frustrating experience but I would ask you not to paint all realtors with the same brush. I used to have a career in education and my wife and I flipped a number of homes and I didn’t use an agent. I was lucky…but I didn’t know what I didn’t know. Now that I have transitioned into real estate I am in a position where I would never NOT use an agent. I won’t even sell my own home because everything in a real estate transaction is good – until it’s not. As a realtor I (we) have a fiduciary duty to our client with whom we establish an ‘agency’ relationship. If you are a buyer, my job, training, and experience is used to help you accomplish your purchase for the lowest amount and with the best terms possible. Working with sellers it’s the opposite…help them sell their home for the most and with the best terms possible. My (our) duty is to the client not the commission. Yes, I’m confident that there are unscrupulous agents out there…as can be said, I’m sure, about any profession but we are certainly not all like that. I run my business to honour my clients and their goals first and I think you happened to have a very bad experience and there’s got to be an agent out there who could redeem this for you. Real estate transactions are one of the most expensive and stressful things the average person undertakes. Our job is to protect you, advocate for you, negotiate for you, and ultimately get you what you want!! I do none of what you experienced and I wish I could serve you to show you how it can and should be done. Find a realtor who aligns with your core values and truly will represent you. Best of luck to you!!

I didn’t know that a real estate lawyer takes 3% to 7% of the commission after the final purchase price. I thought it would be more

NextDeal says:

Using or not using an agent is your prerogative, so is the potential risks and rewards you created in your mind. Everybody has a different view, perspective, mindset and appoach. For me as an invester, I will always use a credible broker/agent, I prefer not dealing with emotional, uninformed and clueless buyers/sellers not familiar with the industry and processes and many a time producing one sided risky contracts from their lawyers. I decide on price not commission when making an offer. Even when selling, the price takes preference. The agent must make it happen, this is what they do for a living after all…

Varinder Kainth says:

I have been providing marketing services to Real Estate Agents since the early 2000’s and personally feel that Real Estate Agents get paid way too much for the amount of work that is put in and agents know that. Just recently, I had an agent call me to complain that my staff/photographer did not spend enough time at the house to justify his commission of $40k to sell a 1 bedroom condo. The place was less than 1000 sqft and the photographer was done shooting in 25 minutes which is normal. The place was clean and ready and did not require any finessing. I have tons of other stories with the same underlying issue.

Real estate is a TRANSACTION based business and NOT SERVICE based. Try telling an agent you want to close in 6 months and you will see them running away from you. They will make every excuse that this cannot happen. An agent gets paid the day the transaction happens and the money exchanges hands. An agent will want this to happen as soon as possible.

There is no difference in the amount of work involved for a real estate agent in selling a 500k condo vs 1.2M townhouse. The commission on the condo would be $17,850 and $44,100 on the townhouse–a difference of $26k. I would like a fellow agent explain to me the reason for the difference.

Lovey says:

Are you kidding me? The commission is a percentage of the sold price. The higher the price the higher the commission.

keri says:

Honestly, comparing a realtor to a lawyer or other professions has not relevance. Second Some said they don’t sell houses every month and sometimes have to bank ect…. Why should we have to support you if you dont sell a house every month. Honestly if you need to have money every month then get a different job that pays regular. Not out burden to bare. I firmly believe that it is over priced the percentage. Really drinks, snacks at an open house… Dont. I feel that to many do not earn their percentage. If a realtor does a bang on job then let the buyer or seller tip them just like in any other service job. I am looking at buying a house and I have not had one out of five realtors jump to help me by sending me information ect. They said call when you find a place to view. I never call because they are lazy… that is out in the Kootenays. It’s all an allusion, the suits, coffee perks looking all hobnob… get real and realize that their needs to be a decent standard in this profession. Nurses work hard, teachers work hard, so don’t tell me realtors deserve high percentages without accounting for the hours.

Tim says:

What this article suggest is “rate fixing” and is a criminal offence punishable by prison time and millions of dollars in fines. There is so such thing as a standard commission rate for any specific brokerage. A good agent offers a packaged service, hopefully knows how much his/her service is worth and will not negotiate that unless some services are left out of the pack. Realtors take a risk with every transaction and have legal liabilities on behalf of their clients beyond what their commission can ever pay for. You don’t see anyone trying to negotiate the salary of a waiter at a restaurant. You also don’t see people showing up at court to defend a 1mm+ lawsuit without legal representation. Successful realtors work very hard to earn their living and go above and beyond to keep their clients happy.

Megan says:

Just came across a company called Buyer Bonus (www.buyerbonus.ca) that offers 70% cash back. Anyone used them before?

OnePercent says:

For thirty years I was a builder and it always killed me having spent six months and (often) my blood building or renovating a place only to see a realtor walk away with 50K for next to nothing in comparison. But selling without a realtor is a really tough proposition. Not only do the public search through realtor.ca to find their new home (which you can’t list on) it is a very time consuming process which often is simple but can get very serious and fraught with danger. I finally gave up and joined the dark side and became a realtor with One Percent Realty. On a million dollar listing my commission is $10K which gets split with the buying realtor 50/50. Normal commission would be just under 30K. Client saves $20K, enough to renovate the kitchen in their new home for free.

Chad says:

The problem with commissions in places like Vancouver is they have not adjusted with the home prices. They made sense years ago not so much today.

Average detached home price in Vancouver in 1990 was around $300,000, average home price today I believe it’s around $1,200,000. That’s an increase of 400%.

In 1990 7% + 3.5% on $300,000 = $14,000.00 commission.

Today 7% + 3.5% on $1,200,000 = $45,500.

Lets calculate inflation from 1990 to 2017, that $14,000 in 1990 would be worth approximately $23,500 today based on the inflation calculator on the bank of Canada website.

Even taking inflation into account Realtors are charging double (I’m talking Vancouver because it’s where I am) what they did almost 30 years ago.

There is nobody that is going to convince me that real estate industry as a whole is not gouging people. They provide a valuable service no question but they are over charging by a lot.

Elena says:

Great analysis!

Pat says:

A lot of people are simply ideologically opposed to paying anyone money, let alone enough money for them to live decently. I’ve worked a variety of jobs during my lifetime from a Marine Engineer in the Navy to Computer Salesman to house painter (not necessarily in that order) and in every case (well, except the Navy) my preconceptions about how much work went into the job were woefully wrong.

I have no doubt that being a RE is a huge amount of work and I also think people should make a decent living (not necessarily a huge amount).

When it comes to real estate the thing that irks me is that while home prices have skyrocketed (my is quadruple or more of what I bought it for 25 years ago) the realtor’s percentages have not really changed. They’ll make quadruple what they would have gotten 25 years ago yet at the same time my wages in the good government union job only doubled in that amount of time.

REs, while they definitely work for a living, are far more productive with all time management/saving abilities available yet this time savings doesn’t seem to carry over into price breaks for customers.

Plus, as a seller or buyer the whole agent system is really rigged against us. Buyers want to save money but since both agents get a percentage of the sale price, there’s an incentive for both REs to push for a higher price. Although in reality the seller rep would probably rather sell a little lower and make more sales – economy of scale.

We really need a re-worked system where buyer’s reps make less the higher the price gets and seller reps get the opposite. Then there would be real negotiation, not two parties both interested in the higher price.

Been buyer and seller says:

Excellent suggestion—listing agent’s commission should go up with higher sales price, buyer’s goes down with higher sales price. Then they’d have to work! One agent I’d listed with told me ‘My job is to get a deal.’ I said, ‘No, your job is to get me the best price!’ I later found he’d been discussing offer strategy behind my back, with a younger, less-experienced realtor. And, yes, I believe owner-sellers can list on MLS for a certain fee (‘membership’) per year. I would sell with the right agent—takes work to find one—but prefer to buy without one. I use my notary to vet deals and contracts. There is NOTHING the realtor is liable for no matter what they tell you—you have to sign disclaimers for everything and pay your own transaction fees, etc. My notary charges $800-$1400 for the real work of the deal, the real estate ‘professonal’ ends up with $40k! Imagine the work you’d have from a lawyer or a chartered accountant for that!

Almost a realtor says:

Wow I would sure like to know where the 4 week course is? Been studying for 7 months full time. The course was 1200$ plus I took a second course on how to pass the first crazy intense course. 500$ couldn’t work during this time. I live on northern Vancouver Island where no other realtors live in my town. A couple are in a neighbouring town and one shows up on Tuesdays from 4 hours away. I was always getting calls about zoning because I was chair of an Area Planning Committee. I also have rentals and really like helping young people find their first home even though they move out of my place after that. I have developed subdivisions and bought and sold over 20 houses with and without realtors. So I thought I should become a professional. The average house price here is 250,000 so the commission would be about 11,500 split in half is 5750$ and I think in my first year I get a 60/40 split, so that is 2300$ sell 10 houses a year and it’s not worth the life time of experience I bring!

Dustin Henfrey says:

It’s very easy to criticize anyone’s profession without actually doing it full time. Yes great we all know someone who has got lucky sold their own and saved thousands. Yes that goes on in this world and will always happen. But to actually speak on the matter go out and get licensed and actually spend your time delivering quality service to people. You will find out that the amount of time invested and the expenses occurred barely cover the costs of being in the business. Why don’t we talk about the unrealistic sellers or the tire kicker buyers that string us along for months at a time who never buy but keep dangling the carrot in front of us that they might. It’s an easy industry to target if you don’t understand it so my suggestion is to give up your day job and your comfy salary and give it a try for six months. You will find out very quick with six months of no income how hard it really is and how the services are worth every penny charged.

Kyle says:

Then why not just offer the services for a set rate instead of a commission Dustin? Should be easy enough if they’re worth every penny right?

Michelle says:

I’m a REALTOR®, and I’m a new REALTOR®. The amount of research involved and the preparation involved is enormous, and we also have to promote ourselves to buyers who think we are scum because other bad realtors ruin that for the good ones. The commission is not enough for what we do behind the scenes. We are continually researching, and we are always perfecting our presentations; there is so much work that we do that you don’t understand because you are not an agent. Please do not speak ill about us because we are just trying to earn a living just like you. However, we do not get paid unless we have a client who has a signed representation agreement when either the seller or buyer either purchases and makes a sale. We have to prospect for new clients to make money continually. If we don’t do that, we don’t make money. I started in 2018, and I haven’t been paid, and I have honestly worked every single day on some real estate business, so it is a challenging job to be in. I’m working with a buyer and seller now, and that’s perfectly fine with me because I know that I can give them my full attention and do all the research that is needed every time you work with someone new. Every client is different, and we need to know how to approach the situation, which is done by lots of research and preparation.

Neisha Lee says:

I completely disagree with anyone who thinks Real estate agents are a total waste of money. They have 5 yrs of schooling & it’s THOUSANDS of dollars each semester. So after 5 years of learning & all the money spent, wouldn’t they obviously have some knowledge about the industry & some ability they can apply when getting prices knocked down for clients?… Knowledge & ability that just normal home owners & normal people in general would not have?.. I think it would be really silly to think otherwise. So when they get thousands of dollars knocked off of a house their client wants but the client still pays the difference because of commissions, it does still get split few ways so in the end , the amount that the agent gets is definitely earned & they deserve it. I don’t even think it’s fair that they have to split it. Also, yes I know that you can sometimes get a “good deal” when buying through private sales, but again, your dealing with normal people without certain knowledge and who could have an emotional attachment to the home so they can be pretty stiff on the price, refusing to believe the reality that there house is being over priced…. anyways I’m done ranting & rambling … but I had to voice my opinion and why I think it’s rude to call them “a waste of money”…

Kyle says:

It’s not about “wasted money” Neisha, it’s about determining proper value for the service – and also where are you getting 5 years of schooling from?

Jeff says:

5 years. I didn’t know you could get a bachelor’s degree in real state agency.

Andy Radlgruber says:

Real estate commissions drive me nuts. The main reason is that the three houses we have sold through realtors have sold within the first few days, for more than asking. The realtor really did nothing as the photos didn’t even make it to MLS. The houses sold themselves and for that we paid dearly. One tactic that no realtor would own up to is to lowball the listing price to make a quick sale. By keeping it say 30K below what it could be they are only missing out on a thousand dollars, but you are missing out on 30K.

Marta says:

did you know that a portion of that money you are “wasting” on your agent goes to a organization that will FIGHT the goverment for YOU so taxes as land transfer don’t get higher? did you know that when you use a agent you are ALSO using his insurance I case something goes wrong? Well, is he seller sues you and you don’t have a buyers agent (and trust me they will as they will specially if they did use agent) you are own your own? I could go on and on here for you ignorant people who thing all agents do it to put up a sign on your front lawn. Oh wait, the 1% agents will also maybe give you a lock box. Why would a agent have their name and reputation on the line for you for free?

Kyle says:

Marta – why fight the government? We live in a democracy, just contact your local representative on your own!

stan says:

Using an agent is optional. I do not understand why people are criticizing their commission fees.

For a different perspective: Let me and six of my friends borrow your kitchen for a different day each week. The kitchen is there, stockpiled and mostly unused. It isn’t worth anything during that time, so why would you want me or my friends to pay to use your kitchen? Would it be inconvenient for you ? LOL People are weird.

Realtors are people with a job, and it is a job that seems easy to an outsider, but then again, not everyone has graduated at the top of their class, whether it is a Realtor or you in your job or profession.

Smart people use and hire smart people.

Kyle says:

Stan, smart people understand that they should people in transparent, upfront costs – not percentages on a commission basis.

Rob Pateanude says:

The Whole For Sale By Owner market has opened up over the last few years. PropertyGuys.com offers a Great option for DIY’ers looking to save on Agent Commissions.

Spicoli says:

The last four houses we’ve owned, we have found by ourselves online. We did the neighbourhood research by talking to neighbours, coworkers, teachers, firefighters and police officers.

We have also done our research on comparable houses in the neighbourhoods by scowering online listings and other completely free resources including BC assessment numbers.

Having done the work ourselves, we felt like we knew the neighbourhoods, neighbours and many other details that realtors could never provide in their listings.

We submitted our offers directly to the selling realtor and because of that we saved $$$ by cutting out an unnecessary middle man.

When it came time to sell our last house, we interviewed many realtors and took detailed notes on their listing fees and what was expected of them in return. After averaging out the fees they quoted us, we gave all the qualified realtors the same offer…..2.0% of sale price.

Some realtors got angry with us and some never called us back. One realtor in particular called us back and after a short conversation about our expectations and average sale times in our neighbourhoods, we listed our place. Our house in Langley sold within 3 weeks for very close to what we wanted.

We did our own open house and kept in contact with our realtor.

I really doubt that a higher priced realtor could have done any better for us. We did our homework and had our house always ready for showing.

The housing market in BC is fairly hot with the low interest rates and high density of population. I strongly believe that going with a higher priced realtor wouldn’t have produced better results.
I also believe that the current real estate fee structure is as old as dirt and needs to catch up to today’s technologies.

Do your research/homework!!! Know your prices and costs!!!
Don’t just settle for what the realtor is feeding you, negotiate , bargain and be ready to walk away.

I personally don’t care about the realtor sob stories about how little they’re taking home after paying out all their fees. That’s not my concern. My concern is to get as much $$$$ for my home as possible. As a realtor, you can either make a little bit of money on my sale or I will cut you right out of it and you will make nothing. Choice is yours.

Kyle says:

Very cool story Spicoli. This is an interesting middle ground agreement! Kudos to you for realizing how much leverage that you had in hiring a Realtor.

David Cousineau says:

If you feel capable to buy and sell real estate without the assistance of a Realtor, then by all means go right ahead. Many people do this successfully and enjoy the experience. The problem we Realtors have with allowing non-members the use of Realtor.ca (MLS system) is similar to a mechanic not wanting you to walk in to their garage and use their tools. They paid plenty of money for those tools, the garage, the expenses associated with that garage and advertising to bring people to that garage (not to mention the countless courses they took to get educated).

Has anyone talked about what would happen if the “bargain” you got buying a FSBO ended up having major undisclosed issues be it structural, financial or both? Once that FSBO seller gets your money good luck getting any of it back.

Most Realtors treat their clients with respect and provide professional services to them. Like any business there will be bad apples. Just look around your business and tell me that everyone who works around you are the best at their craft (be honest).

I could rant for hours, but the bottom line is that if you don’t want to use a Realtor for whatever reason then don’t. The reason finding a house on your own is so hard is because you are not a professional Realtor. You have not been trained and you don’t have the tools. Please don’t ask to come in to my garage to borrow my tools because #1- I am the one who did all the research before buying them #2- I paid for them #3- I doubt if you know how to use them properly.

Andrew says:

Thanks Kyle.

Turns out it was generic messages in the contract that said “Costs that might be incurred include…Commissions – paid by seller” and further down indications that the offer was written by an agent acting for the buyers. We cleared up that they were being paid a flat fee by the buyer and not getting commision. They were enlisted to help draft the offer as we are both relative neophytes at real estate contracts.

We now have that flatly stated in a page in the new offer. It did have me worried but I think it’s ok. I also sent it to our notary and she seems fine with it too.

Kyle says:

Sounds good Andrew, glad it all worked out!

Andrew says:

I am working with the current tenants of my condo in Vancouver on an arrangement to sell it to them. I have no agent and all along in the discussions we have had we talked in terms of a private sale. I gave them a “no agent, no commission” price. They countered and I agreed. Now I have just received from them a contract prepared by a realtor with all indications that they are expecting a commission out of the price that was agreed to privately. I’m pretty upset by this as I am sure our communication was very clear. If I have to pay that commission it could be about a $15,000 difference in my net. The realtor did about an hours work on a form. I had told my tenants/buyers that if I listed, my asking price would have been higher, and I have been told by another agent (not working for me) that it could be quite a bit higher. Arrgggh…

Kyle says:

That’s incredibly frustrating Andrew! I would definitely go to them and tell them that there was no commission in the deal the way it was structured and that they have two choices:

1) They pay the commission


2) Go to a real estate lawyer and get the same offer prepared for like $1,000.

Jal says:

Real estate agents are helpful, but I don’t think the commiss should be that high. I think total 1-2% is reasonable considering the type of work they are doing. I wish the government comes in to fix it.

Kyle says:

Why should it a percentage at all Jal? Lets just figure out what the market value is for all the work a real estate agent does and then pay them a quoted price that is easy to understand and compare!

oslerscodes says:

I have purchased 2 and sold 2 properties – and believe real estate agents add value to both buyers and sellers, beyond access to the MLS.

My issues surrounds the incentives (or lack thereof) built into the compensation structure.

I live in Ontario and the commission for all 4 transactions (of which I only had control over 2 of the listing agreements) included a 5% fee plus HST to be split, equally I believe, between the listing and purchasing agents.

In such a compensation structure there is limited incentive for a seller’s agent to hold out for the best selling price. That extra $5k or $10k that might come in with an extra showing or week or two of listing is only worth $125-250 to the seller’s commission which amounts to $12,500 on a $500k sale. As such the agent’s incentive is to take the earliest offer near the market price. It’s my belief that this has also contributed to the current “auction” format for many of the sales within the GTA.

The Re/Max compensation structure alluded to above has the opposite incentive – 7% for the first $100k with a declining rate thereafter. For a house with a predicted market value near $500k a monkey (with access to MLS) could get $100k for it even if it took the listing photos with a polaroid – and this is the component of the price the seller’s agent makes the largest component of their commission.

Instead after agreeing on a listing price the first 80%+ should be at a discounted rate with the compensation percentage increased for every dollar received thereafter – even if it was 20%+ for anything above the agreed upon listing price. This would ensure the agent has the same incentive as the seller – to get the best price for the asset for sale and not just to turn the sale around fast.

Elwood says:

I bought a new condo through a realtor last year in Montreal from floor plans. As other posters mentioned there was supposedly ‘another person coming to sign from out of town the next day’ so I had to make my mind up fast. Luckily I had been looking for 2 years while saving and had seen nothing like the place in that time, so I knew it was a good deal. I work in architecture so I asked for some changes (honestly, I re-designed the place, ha ha) and the realtor made it all happen for me without any extras from the builder. Her advice was ‘draw up the floor plan exactly as you want it and we’ll see what he says’, so I added a w/c and moved things around. I can’t say the experience with the realtor was the best, but she did make it happen because she had the incentive to sell and get the commission from the builder. In the end I really won out – when I was moving in the builder told me that the realtor had made an error and accidentally listed it as the price of the unit below. My purchase price was $175 000+tax, but was supposed to be $190 000+tax. The builder told me that the realtor had to pay him back the $15 000 difference because it was their error, and “I just got a really good deal”. I think its the truth because I have never seen anything remotely similar in price, and now its a custom design and my dream space with the changes I made!

As for selling, I would probably go FSBO because the duproprio site in Quebec is very actively used and searched by people buying.

Kyle says:

That’s awesome Ekwood – congrats!

Brian East Coast says:

At the end of the day, the issue for me with real estate services is our own WTP, “willingness to pay” for the service. You wonder why we pay so much for selling a house…it’s WTP, what the market will bear. Same reason we have some of the highest cable and cell phone rates in the world. Some will argue that the commission structure, dividing fees between listing agent, selling agent and brokerage company, has led to the high fees to sell a house. I tend to think it’s the WTP that has led to the ability for real estate fees to be so high. In other words, our willingness to pay high fees has led to a commission structure that allows fees to be divided several times and still keep all the agents and brokers relatively happy. If our WTP was less, let’s say we refused to pay anymore than 2% of the purchase price of a house, you can bet that a different sales structure would have to exist to make it viable.
We allow this to happen, we hand over 5-6% of the purchase price on most every property sale and they are lined up to take their share.

The WTP for me is not 5-6% of the purchase price. I have renovated and sold a number of properties with and without agents. I rely on my lawyer for legal advice, real estate agents for experience in negotiations and the marketplace. No where in my world does the service equate to such high fees.
There is a demand for professional, ethical services that reflect value for service in selling a property. At some point, a company will create such a structure and their business will explode. Current real estate companies should give the people what they want or they can continue their old inefficient over priced services until a “disrupter” company arrives and sets their world upside down.

JohnAnthonyGillan says:

Some (not all) of these Realtor comments come across a bit illiterate, are rambling on quite a bit or rely on poor reasoning and logical fallacy.

I would have expected greater clarity and more polished business skills but there you go. Just regular folks. I’m learning people are often the least what you’d expect.

It’s great to know the field is somewhat uneven and that one should hand/pick ‘stars’ who suit your style. I would value a listing realtor who is great to deal with, brings effective resources, solves problems smoothly and maximizes a sales yield correctly measured to the market. (Similar skills for buying.)

Such a person might save time and stress and possibly also net you more money than selling alone, but I would honestly expect an aggregate of all these benefits, per the case. Even with a better sell price Realtor fees might still cost you some difference of cash over and above the value of other resources they bring, and I would look closely at a total benefit analysis to estimate all that going in with eyes open.

Gabe K says:

Wow! Crazy feed. Lots of interesting info I can use when discussing commissions with my clients. Thanks

Leslie Brlec says:

Very interesting to read everyone’s point of view.

Michael Herman says:

Assuming a developer comes in with an offer of 1,000,000 (or whatever the offer is, hire an agent and offer to pay them 15% of anything beyond 1,000,000), or you could penny pinch and assume that they will pay you 1,050,000, and start the 10%-15% from that point.

Assuming offer is $1,000,000, They haggle and get it up to 1,100,000, they make 10k-15k, you get extra $85k-$90k.

Johnny Radiant says:

So what does one do when a developer comes knocking to buy your places (not a simple one house one lot transaction) and you soon realize you need the help of someone who has negotiating experience?

The seller already has the buyer so the ‘hard’ part of finding the buyer is done now it is just helping the seller get terms and cash in manor that is fair to both parties.

How is that typically remunerated?

Kyle says:

Hey Johnny – I’ll do it for $1,000! JK. While I am obviously not a real estate professional, I’d say that the universal rule of “everything is negotiable” rings true. I’m sure there are lot of folks out there who will do it for a 3% fee. Personally, I’d look for a lawyer that specializes in real estate, and then go with his recommendations from there. My guess is that they will quote you a set dollar figure up front to handle the logistics, and then recommend a negotiator they’ve worked with before. Good luck!

AJ says:

The real issue here is that the buyers continue to use real estate agents to buy homes. These agents when hired don’t show homes listed by owners or discount brokerages. This is a sort of cartel, full service brokerages have built for themselves. The only way to solve it is to make buyers pay for the commission, if they chose to higher an agent. I still don’t understand why would any buyer hire an agent in this day and age of digital media. Buyers who hire agents do get some advantage in terms of head start in seeing listings posted on MLS. For that, if they are will to pay commission, that’s their choice.

Marko Juras says:

Lorne, $50 million in sales it not out of the question for one individual in the year 2015.

The technology landscape has changed dramatically on so many different levels since I started in 2010. 98% of my transactions are now done via DocuSign. I’ve received offers, made changes to the offer based on my clients’ instructions, and DocuSigned back to my client all from my phone.

When I started 5 years I would have had to go to my office, print off the contract, make changes, and typically go see my client physically as many people do not and did not have a scanner/printer combo. This practice is almost completely gone from my business allowing me to take on a lot more volume.

Land title office is 100% online, I have the city munciaplities email me all the permits/etc.

You would be shocked in the efficiency improvement even since 2010.

Marko Juas says:

As one of the top REALTORS

oli says:

Agree that Buyers wouldn’t care if the Sellers are paying a small fee on a mere posting or if they are paying full commissions. And it wouldn’t affect the price they offer.

The only exception are very savvy Buyers who knows the Seller is saving on commissions through the mere posting and asks for some of that back through the sold price. This of course depends on the type of market (ie: In a Seller’s market, Buyers wouldn’t have that kind of leverage).

That’s why as much as I’m against using Realtors, I would stay away from mere postings and rather negotiate a better discount with an agent.

P.S. For someone who deals $50M/yr, they should be able to spell their own name right.

Lorne says:

Michael Herman made a note earlier about general ego boosting which I wanted to comment on. Years ago I worked for a real estate statistics provider, and when mid-year and year-end sales results were posted the firm would run stats to determine who was #1, Top 5, Top 10, Top 1%, etc., by listings sold, by sales $ volume sold, etc. It’s all ego driven because they use those stats & certifications to differentiate themselves from the hundreds or thousands of other agents in their MLS. Marko himself is proof of that. Way up in this thread (2013) he said he sold $21 Bil n in 47 transactions. That’s an Average Sale Price of $446.8 Mil. Ridiculous! Now, to his credit he did later admit it was a typo, even though the B and M are not even right beside each other on the keyboard. But in May 2014 he stated he will do over $40 Mil and over 80 transactions. That’s 1.5 transactions PER WEEK!! Having been to many Real Estate Sales conferences (Craig Proctor for example) I know that all of the top producing agents do not do that volume on their own. They have a team that supports them but it’s one man’s name (or woman’s) that goes on the transaction unless it’s co-listed. More recently he says he is top 1% and sells $50 Million a year. On the other hand he says realtors don’t sell, they facilitate. This last note is probably the truest statement he has made, and all real estate agents need to do a better job of advertising themselves that way. When it comes to real estate sales and transactions, Agents have absolutely nothing to sell. It’s the homeowner who is selling the product and the agent only represents them. As a person who actually sells a product for my living, I get offended when agents say how much $ they sell. Again… they need to stroke their ego. That said, some agents are definitely better than others and it does take a lot of hard work, a good supply of relatives, friends and connections, and a little luck to get started on the road to becoming a successful agent. I’m convinced that there are many Top Producing Agents who are worthy of that distinction (Marko for one), but don’t ever let let an agent tell you how many millions of dollars of real estate they’ve sold, because it’s just not true. The owner is selling the home. An agent simply has the privilege and good fortune to be representing them and they should keep their ego in check and remember that. Am I splitting hairs? Maybe, but having sold statistical information packages to agents, I know from my own experience they can be as honest and truthful as used car salesmen.

Robert May says:

This information is partially correct. There are actually several different commission structures and models in different parts of Canada and the USA. Exclusive seller agency, buyer agency, fee for service, etc are just a few common models which are different than what you describe.

Cam says:

We have never sold a house using a realtor and NEVER will!I don’t need anyone to sell my car for me, or anything else I sell privately , so why would I need a rapacious realtor? My husband is a lawyer so we marketed our houses on MLS using a fsbo+ mls brokerage, did your own websites ( we did hire a professional real estate photographer to do pics and videos) and VOILA! WE sold for 100% of what the realtors suggested we list for with them.( 1.2mm to be exact, for our last home) It is important to use a company that gives your contact info directly to buyers- that way you don’t even NEED to deal with a realtor- as they often will not forward your info to their clients. (Why we still have relators, I do not know- and I dearly hope the perceived need for them is nearing an end) Take the money you save on commissions and take a trip! We will soon be selling our third home this way.

Kyle says:

Great story Cam! Thanks for input. I’m convinced this is the way to go.

Mikejb says:

I stumbled across this blog today purely the result of asking “Google” What are the standard commissions of property sales of canadian properties. Now, some considerable time later, having taken the time to read through this entire discussion, whilst I am more ‘aware’ of these costs, I am most definitely all the more confused by the Canadian Realtor system, or more precisely, why Canadians appear happy to go along with it.

Before I continue I should like to say, an amazing blog and long may you continue to devote not just your time but that you allow the platform for others to pass comment.

On the discussion itself, many points have been made throughout in making clear, whatever the realtor charges, these fees will ultimately reflect the overall sale price for the seller if only for the simplistic reason, these costs will eat into his/her profit which in turn may/will affect their own next property purchase. It therefore follows, a reduction in such costs should allow for a reduced sale. This of course assumes this principal is followed on their next purchase and next

Kyle says:

You make some very good points Mike. We have a great product coming out later this week that I think you will find very interesting. Keep your eye out for it!

manny says:

real estate agents re going to go extinct. most are scum and losers adn dont know anything a regular informed individual wouuldnt know. i know many agents who do back door deals and screw people without them knowing

Mark says:

LOL. I just love how people love to hate agents. If it’s sooooo easy & there is unlimited money in it, then quit whining about it and get licensed. I’m sure you’ll find it’s not so easy. All these negative whiners have nothing better to do, they complain about lawyers, FA’s, realtors, and everything else under the sun; quit being so jealous! It’s not attractive. If you’re not happy with your life, fix it! Don’t sit here and complain about other people’s success. So sad & pathetic!

Kyle says:

1) No one said there was unlimited money (maybe an unlimited quest for money…)
2) So sitting here and complaining about “other people’s (sic) success” is sad and pathetic, but commenting on those peoples complaining is… productive and happy?

Matt France says:

…either way, you are focusing on precisely the wrong point, as that part doesn’t really matter. Yiu should check out the LSAT website though and see the kinds of questions; Law schools want a higher score though. The fact is that the public would fail miserably if they tried to pass the exam without studying, and that should tell a gigantic story itself with regards to all of the people out there who think they know everything and think there is nothing to that one/initial aspect, of many aspects, of being a Realtor.
Even with the professional fees I charge, there are many instances that I don’t think the risk is worth the reward, as its inevitable that some listings don’t sell, where the thousands, and sometimes tens of thousands of dollars I spend are for nothing. Do you have the stomach for spending $1,000 to $10,000 (and more on multimillion dollar listings) on someone’s listing and have it not sell? I doubt it. Many Realtors go out of business fast who don’t understand the feasibility of the process. From the experience of someone who is actually on the front line, in most instances, you should want someone with skill, experience, and the budget, at doing ALL the right things to help you sell your property and get the best price. The very first interview yiu have with a Realtor, in my opinion, should demonstrate to you that he/she can get past the first gate by justifying their own commission. The best Realtors are the best Realtors, in part, because they know how to sell, where only the first part of that means they know how to justify their own commission. Look at the Real Estate Board of Greater Vancouver’s Medallion winner list (top 10% of Realtors by sales volume of 11,000 members), and you’ll see that 99% of the Realtors there are Realtors who can demonstrate a commission similar to mine; there are literally a few exceptions on that huge list. Those 99% or top producers for a reason and the kind of Realtor I would want. This empiracle data tells the story in a way that I don’t think you can win an argument around.

Kyle says:

Then how do you respond to the raw data from Freakonomics and several other sources have cited Matt? This data shows there is way more incentive to sell a property no matter what the price than there is to get top dollar for it. That’s the empirical data that really tells the story to me. I’m not sure what your data proves except that people like to use front runners. It becomes a positive momentum spiral where if you make the top 10%, you’ll get the top listings by default and so on.

Matt France says:

You obviously have no idea what tge MCAT or LSAT is.

Matt France says:

Something like 50% of the people who take the real estate licensing course fail the exam the first time after 6 months to a year of assignments and studying; its not because 50% are stupid. It’s an exam that I have heard is as difficult as the LSAT (for law students) and the MCAT (for medical students). For all of you who don’t think a Realtor is worth their commission, and feel you know how to protect yourself throughout a real estate deal, I’d love to see you write the real estate licensing exam without studying and see what you get; 0% to 25% is my guess. Think hard about what that could mean if you tackled selling your home yourself (by the way, that should be an aha! moment for you). We also take ongoing mandatory education every 2 years where there is a plethora of things we learn to protect ourselves and our clients. As well, some Realtors, like me, have been trained by a Fortune 500 sales company who is world renowned for having the top sales training in the world, where the sales associates were trained to sell a premium product, not just sell based on priced. Anyone can say “you should pick me because I am cheaper”. Who would you like working for you; someone who can command, and justify, his/her commission, while trying to help you get the best price, or someone who only knows how to sell based on price. If I were in your shoes, knowing what I know, and seeing how things happen behind the scenes, I would definitely choose someone with such skills. Also, there are many Realtors [me] who have significant training and expertise in marketing; marketing takes money and a Realtor has to always balance the risk versus reward of spending marketing dollars to help you sell your home. Keep in mind, in a balanced market only around 2
18% of the listings on MLS sell each month and more than 50% don’t sell at all during their listing term; if you want your Realtor to market your property properly, the commission has to be worth the risk. I have had 250 people come to an open house and can directly show my clients that I exlosed their listing to 100,000 people in the first week of it being listed. There is no way I could have made that happen if I didn’t have the budget and, in turn, there was no way my client would have received 5 offers and accepted a price $220,000 above their asking price. If you hire me, yes, you have to pay for it, but the vast majority of my clients are far more ahead by doing so than if they cheaped out with the marketing budget. You take a much bigger risk in so many ways by not hiring an appropriately skied professional and giving him/her a marketing budget that provides the adequate balance of risk versus reward.

Kyle says:

You raise some ok points here Matt, but to be honest, you sort of crippled your argument at the beginning by comparing a real estate exam to the standards exams needed to become a lawyer or a doctor. That’s just ridiculous and if you think about it for a second I think you’ll have to agree. I love the empirical idea of “I’ve heard”. Wouldn’t someone have to be a Realtor, lawyer, and doctor to figure that out? Wouldn’t you need a large control group of those people to really get a good idea? I’ll go with the deductive reasoning that a career that requires years of intense study and that plucks the brightest people out of the post-secondary pool is going to be a little more difficult than the world of real estate. No offence – there is certainly a lack of MENSA candidates in my profession as well, but let’s just call it what it is.

Marko Juras says:

Actually I am moving into a 5,000 sq/ft custom home this summer that I am having built. My 2.5% gross commission includes the cooperating broker fee…I guess you can’t read a basic diagram -> http://markojuras.com/full-service-listing/

Last year I did 82 transaction ($39 million in sales). Would you want a surgeon who does 10 surgeries are year or less than one per month or one that is competent and does 82?

I guess you haven’t bought a house yet cause that “Bubble is not pooping anytime soon”. You must have received your advice from a discount Realtor. I find it funny how you neglected to add the cooperating brokers fee to the discount Brokers fee. 1% plus 2.5%. Or if the other realtor can’t negotiate his own commission than it may be 2% total. I personally wouldn’t feel comfortable using any agent that can’t even negotiate his own hard earned commission to sell my house. What people forget is that Realtors are making You money. A Good one like me will fight for ever extra penny. In many cases 7% more than discount brokers. What’s next trying to negotiate with your surgeon and lawyer? A true professional will not discount Superior service and knowledge.

Marko Juras says:

Gino, every other REALTOR

Oli says:

I must point out that ‘market value’ also includes the commissions paid out to both the seller and buyer realtors.

Imagine the amount of $ that can be saved if both sides can cut out the middle man or at the very least lower the fees to a more reasonable amount (ie: pay by hours worked)!

Gino says:

Author needs to get his/her facts straight on the commission. There is no fixed commission in BC. You can try and negotiate and each agent/brokerage is different.

1% realty doesn’t charge 1%. Read the fine print.

The big firms typically charge 7% on the first $100,000 / 2.5% on the balance. You realize on average this is lowest commission rate in North America! Ontario is 5-6% on the total. Much of the USA is 6% on the total.

You also realize the Realtor only gets paid when the home sells. All the costs and the time invested is 100% on the Realtor. They take ALL the risk. High risk, (somewhat) high reward. Its very expensive to be a realtor. I laugh at all the armchair critics that say Realtors make too much money. I don’t see them quitting their 9-5 job with a paycheck every month, paid vacation and health benefits to run off and make millions being a Realtor. The failure rate on being successful as a realtor is scary. Discounting your commission is the quickest way to be out of the industry.

I love what I do as a Realtor. I am 100% committed to helping my clients though consulting, negotiating and overseeing the entire transaction but I expect to be paid for my time. I am a professional, I act like one and I expect to be paid like one. Try negotiating with you lawyer or your doctor on their wage and tell me how that goes.

You get what you pay for and good Realtors are worth the money. My negotiating skill alone are worth every penny I get paid.

Kyle says:

Facts are facts Gino, have you read Freakonomics? As a Realtor you have much more of a financial incentive to sell my house quickly than to get top dollar for it (negotiating skills or not). It’s a very simple case of economic incentives at play. Also, how does the Realtor take all the risk when it’s me trying to move a huge portion of MY net worth? You don’t sell the property, you’ve lost a few hours of work (no small matter), but compared to me having to pay months more rent and watch my net worth sink, I think you’ll agree the homeowner truly takes the risk.

Good article. Everything is negotiable, and without sending your estate agency crazy, should be negotiated.

Marko Juras says:

Nicole, I happen to live in Victoria, B.C. and I also happen to be one of the top 1% of REALTORS

Kyle says:

I’m going to let Marko blantantly advertise on the website here simply because he’s come across as honest and willing to admit faults in the system. Congrats man, hopefully you get some action out of it.

Nicole says:

First of all I have to say, most of you sound like your very bitter over this. I understand that thousands of dollars are at stake, which is your money which could be used for other things…but it doesn’t sound like many of you have never used a Realtor to sell a home, so you have no idea what goes into it. And those of you who did use a Realtor, probably only saw a very small fraction of the work put in to selling your home.

First of all I am not a Realtor, and I have never sold or bought a home. So I am completely unbiased here, and I can grasp both sides of this feud. Unfortunately this makes me someone that not many of you will probably take seriously. And I understand and accept that. But two of my Aunt’s are real estate agents, and good ones.

I have recently been assisting my elderly father in selling his home, and I have been doing a lot of research into this concept exactly. Hence how I ended up on this site. I have also spoken to multiple agents and I have done a lot of research on doing this with them and on our own and my conclusions in support of doing it on our own are as follows:

1) You can save Thousands of dollars in commission.

2) You get to have all the say in what happens with your listing.

The cost of doing it yourself:

1) Posting to MLS – $350 (in victoria BC) – Self explanatory, sure you can use free websites, but you will not have access to the other 95% of home owners that are in the buy market.

2) Open house (refreshments, brochures etc.) – $100-$150 – sure you can host an open house with out the refreshments or brochures, but I doubt that will do you any good unless extreme luck is on your side.

3) yard sign (plus open house signs) – $50-$100 – No one will be able to find the house, or will think its a scam if you don’t have a for sale sign, plus if you cheap out on this it will turn buyers away as it is already a complicated and emotional process, less professionalism is unattractive.

4) Home appraisal – $300-$500 – The most common reason that FSBO house sales do not move is because they are over priced, and on the latter, you also probably do not want to sell your house for less then it is worth, so if you are smart, you will get an appraisal. Yes, you can do your own research, but this will not provide you with all the facts as another house that seems similar may have more or less amenities then you are able to see.

5) Local newspaper/magazine advertisement – $60/week(per ad)- I’ve based my estimate on two advertisements up for 3 weeks. If your home is priced well and advertised well, this is a good estimate on how long it might take, based on much research I’ve done.(luck could sell it faster, and it could very well take much longer)

6) Real Estate Attorney – $1500 – This is a rate that you should expect to pay. You may find lower rates, but you should know that you get what you pay for. And if you choose not to have a lawyer present you may get taken advantage of in many ways, besides that, the act of negotiations and paperwork used when selling a home is very complicated, most home owners will have very little knowledge of the process.

7) Time spent – 40 + hours (if you process that at say $20/hr)- $800 – If you think that your time is not worth anything, then I suppose you could omit this expense, but I personally feel that my time is worth something, and I am definitely putting effort into this, I have already spent many hours (maybe more then 40) in designing brochures, signs, creating advertisements, not to mention having to show the homes (on an average of 30 minutes-1 hour for each respective buyer, and an open house which will usually be held for 3+ hours, or the hours and hours on the phone.

Estimated Total Cost of selling your own home in a professional manner – $3,230 (and this is unfortunately a low estimate)

Now, on top of this, you must realize that the person buying your home will likely have a real estate agent, and they will require a 2-3% commission anyway, unless on the off chance you get someone buying a home on their own as well…which you have no real control over.

So, now when I look at this big picture. I have to think that I will have a lot of money out of my pocket anyway, whether I use an agent or not. And to avoid the hassle and stress of ALL of this, plus to have a lot more buzz about my home being sold, a Real estate agent with Insurance and training, not to mention the likely hood of my home being sold much quicker. I am starting to stray away from the idea of doing it ourselves.

Look, you all seem to think that they do nothing. And yes, maybe comparatively to a doctor or lawyer, they may be less educated (these are ridiculous comparisons as they also make triple to quadruple of what most real estate agents make–Just so you are aware, the average salary of a real estate agent is $60,000 in BC, $50,000 across Canada) 85 % of real estate agents work full time. And the average hourly wage across Canada for the age/occupation type for this job description are these exact wages based on stat Canada.

Ill tell you what, a Real estate agent does your marketing, advertising and grunt work. They do social networking and social media work, they do sales (and believe me most of the average Joe’s know nothing about how to do this) not to mention dealing with picky customers who don’t give a rats ass about your emotional attachment to this home. They also have training in the negotiation and documentation. They have insurance on your home sale and they have direct connections to the buyers market, plus they have the time.

There are probably a lot of terrible real estate agents out there, and there are most certainly a lot of good ones. Its only your own due diligence that decides that, if you just decide to go with the next Joe Blow that calls you up because your friend gave him your number, your the idiot and I would be surprised if you didn’t get ripped off selling your home by yourself.

And from the buyer’s side, you are paying for the expertise in negotiation, contracts and connections and liability. Most home owners buy off of feeling, your real estate agent will produce facts and realities of situations you didn’t think of, and yes a real estate lawyer can provide you with advice and help with negotiations and contracts. But most of them do not have the inside know how of the situations, they normally do not accompany you to the viewing or care about the emotional factor to this whole process.

Id like to say, finally, that I will not pay any attention to any reply’s that this comment gets, because frankly I don’t give a damn about what any of you say, because to my knowledge, half of you (or more) have absolutely no idea what they are talking about. As for the blog owner that posts reply’s to each and every comment here…You all realize that his job is even more pointless, and he probably makes more then half of the real estate agents in Canada right?

End Rant*

Kyle says:

My job as a teacher is pointless? Ouch… Tough rant. Gotta love the keyboard warriors that the internet produces. Someone comes to your site for free information, then flames the comment board and says they don’t care what anyone else says. Great logic there Nicole.

Johnny Van Islander says:

This would have been a good post if not for the needless flaming at the end. Pretty funny that she starts out noting how everyone is so bitter on this topic, then becomes more than a little bitter herself in the course of writing it.

Be careful when fighting monsters, lest you become one.

Oli says:

Nicole – most of the costs you listed to try to sell on your own are not really necessary. Once it’s posted on MLS the marketing kinda takes cares of itself. Assuming you do some common sense staging of your home, it’s just luck with finding a buyer and a buyer agent willing to accept the commission you’re offering.

Luis says:

Well Kyle,it seems you didn’t read my comment well enough.
1- There’s no way you can compare listing your home in kijiji to listing on realtor.ca or mls. I know kijiji probably better than you as I have been using it for atleast 7 years,mostly to buy cheap things,nothing too important,and specifically in this site is where I actually started advertising my business,and let me tell you that now days kijiji doesn’t even provide me with 5% of my clients even though I pay to have my ad at the top 24 hours a day. So no,sites like kijiji will definitely not speed the process of selling anything unless the price is considerably lower to the competition and that is if they find your ad.
Word of mouth,are you serious man. We are talking about selling a house,is not like going around talking to your friends about who wants to buy a bedroom set that you are getting rid off,or a TV. You know just one of those things that anyone could buy from you not because they need it but because is just might come handy one day,comparing word of mouth to listing in the number one site in Canada,specifically designed for selling or renting houses,from where 99% of all sales come from,please don’t be ridiculous.

2- now you’re telling me that every person has all the time to just go wondering around the house to show the property whenever they want,so what now,where do you live exactly,in your world people don’t work i guess, they have no kids,they have nothing important to do? Wow I wish I could live there myself.

3-I don’t mean to rely on agents to feel safe,I mean at least agents must be licensed and registered,which means that in order to show your home they must book an appointment, something happened and you know where to find them. Is not like some random people are at your house walking around seeing everything you have,yeah they could be potential buyers but they could also be criminals trying to steal from you,as far as I am concerned 99% of the time agents make a contract with buyers before start wasting their time showing houses,meaning that most likely they will know who the people are,where they live,etc… Hope you understand now what I mean by this.
4- I didn’t mean my experience as a realtor,I meant as a regular home owner who bought and sold 3 houses already and because I work and have a small renovation business where I get to talk and deal with lots of different people who are either selling or buying the house. Yes because of this i considered myself to have more experience than a good amount of people who first of all has never bought a house yet,or never sold a house, or your regular guy who has no clue what to look for in a house when buying ,or how to show it properly, because he doesn’t even know what the walls are made of,I guess what I’m trying to say is, it would be very difficult for.the average person to sell his home if he doesn’t know much about this world, you are not being realistic if you think is just showing the house and offers are coming in.
5- I don’t even know what you mean by that.

Anyways, maybe you are in that small percentage of people that are capable of selling their own houses,maybe you do have all the free time you want to come in this forum and just waste your time replying to every single thing others have to say,maybe you are rich and don’t care if your house sells in 7 months or a year,and that’s usually how long it takes when you sell on your own, and then see how much you actually get for it. But I know,because I am myself in the real world, that 99% of people or more do not live under such excellent conditions and unless something drastic happens in this world,they way things are run,we all will be usually better off hiring a realtor,that’s what I think and that’s why I got into the business as well. Am I right or wrong? Well only time will tell, for now I will continue to work very hard and see how far is can get with this.
I guess the last thing I would comment on is this, people do your homework when hiring a realtor,be 100% sure that he is the one,because yes,a bad agent can screw you over and you might lose some money on the sale,or end up buying a house you don’t really want,although let me say this,you always have the final word,you are not.happy about something, speak up then before is too late.
As for you Kyle,it don’t mean to be rude on my comments in anyway, this is just my personal opinion,based on my own experiences.

Kyle says:

I read the comment pretty thoroughly Louis, you’re just not being realistic and lets be honest, you (and the other people with real estate-based incomes) don’t exactly have the must unbiased view on this topic right? I’m going to keep my replies short here because much of it has already been covered throughout the rest of this thread. The reason I have time to come on here btw, is because I co-own the blog…

1) These days “word of mouth” means a lot more than simply talking. I have witnessed double digit sales of houses through social media shares just in my friends’ relatively short time as homeowners. Plus you can list on MLS yourself – you don’t need an agent that takes a big percentage of your house!

2) People make time when thousands of their dollars are at stake. I wish I had the money you do if you think that the average person can’t be motivated by thousands of dollars in sacrificed sales commissions.

3) I get it now, not particularly impressed by it though.

4) I have literally watched people do it this easily in the parts of Canada I’ve lived (the prairies). I can’t speak with equal authority on major cities, but I can’t imagine that given the overheated housing market across Canada over the last decade it take a ton of convincing to get people to put in offers. In Saskatchewan I’ve had friends simply put a sign in the ground with a phone number and get flooded with offers the next day.

Luis says:

This is an old post but I think I’ll give my opinion as well for future readers. Let me start by saying that I have run a renovation company for about four years,sold and bought 3 houses and I’m currently taking the courses to become a licensed real state agent, so I honestly think I have enough experience to talk about this matter.
Agents commissions are not high at all,that’s what I used to think myself,before I sold my last home. Most people are forgetting that the agents must pay a good % of their commission to the broker company.if you are just starting in the business you will probably have to share 30-45% of your gross from the sale. My house sold for 520 000, 2.5% for each agent. That’s about $13000 each before tax. Give to the broker company a good 3 or 4000 in fees and that leaves you with about 8500-9500 depending on which broker you are with.take away another 700 to a 1000 for advertising so what you have left? If the closing is one month or less that’s great for the agents,but most closing dates are in 2,3 or even 4 months. So you see my point is an agent will average like three to four thousand a month and that’s a good new agent with lots of connections,like 20% of all agents are and those amounts are nothing in Canada,not even an agent could afford to buy his own house.Agents only start making real money after years of sacrifice and hard work,dedication, building a client’s network so you can’t blame them for trying to make 100000 a year or more. That’s like when I started my renovation business, the first two years In only made like 10000 each years,off course, nobody knew who Is was,whether it was good or not, I only got hired to do very cheap jobs, without the support of my wife is wouldn’t have made it this far, today I don’t leave my home to go work unless I’m making minimum 350 a day,and I mean a short day,maximum 7 -8 hours, and I’m sure the same story will happen once I become an agent,but for me it’s worth it, it would just be another method to make more money. Most people need It agent whether they want it or not,let’s say you try to sell a home by your self,first of all the places where you will advertise won’t work too fast, so the reality is it will take you a few months to sell your home. Not to mention that whenever someone wants to see the house you have stop doing whatever it is you are doing a run to show the property,are you capable of doing that? Are you okay with showing the house to unknown people at night,at least with agents you feel safer,because whoever wants to see your home has to come with a registered agent who will have to register an appointment and get your approval to see the property. In my experience selling my houses I think that the only way you can sell a home your self is if you have all the time in the world,you are in no rush to sell,and your price must be really cheap compare to other similar homes because obviously that’s what someone will even try to deal with you in the first place right,you have no agents so your price can not even be close to what a similar home with agent is selling for.
Anyway, I think my point is,yes 99% of people usually need an agent,and the small percentage that doesn’t would do so under excellent circumstances. But I guess I could also point out that buyers usually requires less help from realtors than sellers.

Kyle says:

1) Kajiji, DIY MLS listings and word of mouth won’t work very fast? Hmm… source?

2) Am I capable of wandering around my own house and talking about it while someone else is listening (aka showing) – yup!

3) Will I feel safer with another person I don’t really know in my house in addition to the potential buyer I don’t know? Not really, I don’t rely on agents to help me feel safe.

4) In your experience as someone who recently got into the business of sell houses eh?

5) What are you even talking about in reference to cheapness and agent? Your connection makes no sense.

My point is that you really don’t need an agent if you can read a little and clean up your own house…

Marko Juras says:

I am sorry Luis but your comments are a joke. 3,000 or 4,000 in fees to broker? LOL…what brokerage are you with? I won’t bother rebutting your remaining comments….

Please click on this link to one of the biggest brokerages in the GTA -> http://www.joinrightathome.com/rah-advantage

Then tell me it does not say

23 Reasons Why You Should Join Right At Home Realty Inc

Kyle says:

Thanks Marko, appreciate it.


It’s pretty simple, anyone who doesn’t use an agent and are saying that they are making the most important decision of their lives are poor. Rich people don’t have time to sell their own houses.

Kyle says:

I don’t even know where to start with this comment… People that want to be rich and don’t have a huge income could do a lot worse than selling their own house my friend.

Marko Juras says:

Let’s say a rich person owns a $1,000,000 home and is paying 7%100k+3%balance in commission. That is $34,000+tax in commission. If you are rich and in the 46% tax income bracket that $34,000+tax is equivalent to earning $60,000 before tax. I think I would create some time for answering phone calls for $60,000 🙂 You can save approximately half of that $60,000 fairly quickly by going with a flat fee listing package. Most flat fee listing packages offer a lockbox, etc., so that time investment is very similar. You have to step out for showings whether it is a full service or flat fee listing either way. Either way you have to review offers whether the buyer’s agent emails it to you or your listing agent emails it to you, etc.

Kyle says:

Great illustrative example Marko.

Oli says:

Yes good example Marko but the $$ savings is still not good enough. Paying $30k to sell a $1M house is still pretty outrageous.

Mike says:

Likely because they have already shown their clients 40+ homes, and will barely break even. Running a Mercedes or a BMW is not cheap 🙂

Will says:

Hi All,

I am currently selling my Vancouver condo in Yaletown. I decided to list on my own through forsalebyowner.ca I was able to get the listing on MLS for $399.00 plus tax. the day my listing was MLS I had so many calls form agents saying they have a buyer but how much am I willing to give them to bring them to see the unit. On top of that I did an open house the same day as a agent did for another unit in the building. I was able to watch agents come to view the other unit with their clients as they would walk to the building they would try to hide my sign from view of the clients. I have been so disgusted by over paid agents that don’t care about the client at all just the $$$$. Well now I just wait for the person that is smart enough not to believe the agent they are using and go hunting for a place on their own.

PS anyone looking to buy a 1bedroon + den in Yaletown vancouver give me a shout out.

Kyle says:

That is really dirty Will – hiding your sign?! Crazy. Your a better person than I, I don’t think I could’ve saw that and not gotten pretty aggressive…

Will says:

Yeah I just cannot stand these people. I get it its a job but its a job that pays way to high for doing very very very very very little. Sorry I mean do and know nothing.

They call me for showings and every time ask how much I will pay them to bring a client. I think no more then $3000 should not even be that high and they still will not come. Such a joke.

Oli says:

That’s a huge part of the problem. Even if you are able to avoid the seller agent portion, you just can’t escape the buyer agent’s commission! Buyers think it’s ‘free’ for them, so they keep using realtors.

You’re lucky your $399 MLS listing actually worked at least in bringing you calls! I have heard stories where the realtor/brokerage who posts on MLS for you actually steals your leads too. So even if a buyer who is smart enough to represent himself call, his # will not be passed to you. Instead, the realtor who helped you post will try to sell their services to him.

Confused says:

I just cancelled a 7% on first $100,000 & 3% on remaining balance, realtor, for a $6,900 fixed commission for $600,000 & under sale price, realtor. My realtor will share $3,000 of her commission with a buyer’s realtor. Apparently my realtor will not have to share after all because the realtor I just cancelled & another whom interviewed, said that I’ll have a hard time selling my house because “realtors are reluctant show my home because there’s not enough commission in it for them.” So here’s where I’m confused – how on earth, after all the fees & “salaries” my realtor has to pay out from her 1% commission – eat? Clearly she’s making enough money to put food on her table because she’s been doing it for over 4 years with the same reality company. I could go on & on with explaining my confusion but anyone with half a brain will get it. But the way, 1% commission keeps an extra $10,000 of my hard earned money in MY pocket. Me so happy.

Kyle says:

I think you just answered your own question “Confused”. If your realtor manages to gain an extra few high-end clients like yourself because of her competitive commission bid, the low-price strategy will work for her. I think with so many people doing their own homework and looking on the net for properties themselves these days, the value of “other realtors wanting to show your house” has gone down substantially anyway. Look at all the people that sell their house themselves right? Great job keeping $15,000 AFTER TAX dollars. That’s like earning 15-17K right?

Marko Juras says:

Typo….I will clear $40 million and 80 transactions this year but not close to $21 billion 🙂

Frank says:

@ Marko Juras. You mentioned you grossed 21 billion in sales over 47 transactions. I’m having a tough time doing the math on that. Do you exclusively sell islands?

Kiera says:

There are many fantastic agents out there who strive to make the buying (or selling) experience one that their client enjoys and would look back on with a smile.
I am a realtor in my late 20s, I have a university degree, am enrolled in a masters program while being licensed and also serve on a Cancer Care committee and other volunteer boards for NFPs.

I have always had very satisfied clients and my bloodline is referrals from them. I pride myself on working very hard and doing the best job I can.

It is very frustrating when people assume they know how realtors are paid when you are really not privy to the process of our commission breakdown..


A big issue is how uneducated the public is about realtors and what their commission actually goes toward. An agent who is ‘independant’/not on a split with their brokerage/etc does not pocket the amount the seller or client pays out. There are many things that occur for an agent to be licensed that are costly.

For exemple, I am a realtor who is independent, meaning I am 100% and not on a 60/40% split with my office, but I pay huge fees.

For every check, I pay 1% to my franchise, 1% to my brokerage, $150 per end (buy or sell), yearly monthly dues to my cities regulatory real estate office (around $250), monthly dues to my insurance ($150), a monthly brokerage fee, ($1250), advertising fees (differs month to month but around $200), yearly education class dues, provincial dues, dues to the Canadian Real Estate Association (the US has dues allover the place too), office dues monthly ($250), and more

Kyle says:

Ok, that’s a thorough break down that all makes sense Kiera. Let me ask you one question though, just to get the full story out – have you read Freakonomics? I ask because there is some hard data there that shows why RE agents might not add much value.

Marko Juras says:


Kyle says:

Interesting response Marko, thanks for sharing!

Why Hate? says:

I’m a realtor and having seen some of these I-can-sell-home comments, it makes me think twice about these sellers. Realtors are like any other profession, let it be lawyer or mechanic: you pay for our expertise. The way some people claim they can sell their home is the like they can fix their own car or go to court to defend themselves.

Nobody likes to pay commission, just like no one wants to pay legal fees for a lawyer. But when you want a peace of mind, you pay. Oh, and for that comment saying agents’ commission is ridiculous and he can do everything a realtor can, well, why don’t you get licensed then? I wanna see if you’ll even survive you’re first year.

Kyle says:

I understand your point, but are you really comparing the incredible amount of knowledge a lawyer must have with the week-long course one takes before becoming a realtor? Again, I’m not saying there is no value in hiring a realtor – but the comparison to a lawyer is pretty far-fetched.

Why Hate says:

I’m comparing Realtor’s to other professionals, not ONLY lawyers. I also mentioned mechanics.

Like Marko said, there are more and more realtors cramming into the industry as entry is relatively easy. Actually I don’t see this as a problem, but good old friendly competition. The more realtors there are, the better realtors would be at delivering their services and step up their game.

Winners: Buyers and Sellers

Dexter says:

Some great tips in here – thanks!!!!
I just sold my condo thru http://www.MyCondoListing.ca – NO COMMISSION!
woooooot wooooot!!!

steve says:

Realtors are pretty much a total waste of money. Also I don’t believe they should be allowed to advertise their properties on sites such as kijiji

Alex Lam says:

I am a one percent realty agent in Vancouver, thought I would like to share some input about real estate commissions in Vancouver, BC. Yes, do take consideration how much you spend on commissions, I am not against sellers spending upwards of over $20,000 to sell their home, but it really depends on what your personal needs, and specific property type. If you have a standard type property with many recent sales on the market, it can make sense to spend less commission and find more of a discount full service real estate service.

In this real estate market, sellers have tight margins because of high mortgage costs, and buyers are having less purchasing power because of the new tighter mortgage rules. If sellers can spend less on real estate agent commissions, maybe they can price their property so a buyer can actually purchase it.

Lorne says:

Congrats on being top 1%. However your comment raises another very good question on the point of renovating or making improvements to sell a home. If the owner is pouring more money into the home to improve the resale value, I think many people would find it obscene that the listing agent thinks they deserve or are entitled to any part of that investment in their commission.

As noted in Markoi Juras’s comment,

Marko Juras says:

My favorite phrase an older REALTOR

Teacher Man says:

I’ll allow the shameless self-promotion if only to illustrate that even Realtors believe they don’t really add much value.

bobby says:

Not saying all agents are the same,but they do ethical codes that they must abide to. I would to see these stats you speak of. Cheers


Teacher Man says:

Simply check out the book Freakonomics for a detailed look at real estate commissions and what the incentives are for real estate agents. It’s pretty thorough and has since been confirmed by numerous sources over and over again.

Bobby says:

I understand everyone’s concern about the rates real estate agents charge. Let me ask you a simple question.. lets say you got charged for a crime/drinking and driving.. would you hire a lawyer cause he was cheap? or would you be willing to pay more for someone that has your best interest/knows what he’s doing/would you be willing to pay for the best? i think we all know the answer. Buying and selling a home is the same.For most, this is the biggest financial decision they will make. Do you want the cheaper lawyer or someone that will get you the very best deal?

Teacher Man says:

That’s just not a correct comparison at all Bobby. There is no statistical data to back up the fact that your agent has your best interests in mind or can get you more for your house – in fact, all the statistical data says exactly the opposite. Please don’t make completely false analogies.

Paul says:

To Teacher Man and Bobby,

The role of a Real Estate agent is to be ALWAYS looking out for the best interests of their client, no matter how much you are getting in return for commission, it is stated in the Real Estate Services Act that if you are not will to look out for the best interests based on the commission rate to NOT take on the role of that persons Agent. Again if you find that your agent is not looking out for your best interests, PLEASE report this agent to the Real Estate Council Of BC (you can find them online) they take this very seriously. If you havent read the Real Estate Services Act i suggest you dont make comments. The price of the agents commission does NOT reflect how much effort they put in, And if this is the case they are breaking the law and should be reported ASAP!!! I am a fresh out of school real estate agent, I studied at UBC Real Estate Division.

Teacher Man says:

Paul, with all due respect, regardless of what the real estate rules say, there is absolutely no chance that they could track what I’m talking about. Please read the data presented in Freakonmics and show me anything different. The bottomline is that in a world dominated by percentage commissions, the incentive will always be to sell the house ASAP as opposed to getting that extra few thousand dollars. It would be impossible to prove one way or another if this was in the best interests. Statistics bear this out across multiple regions and circumstances and you can see it in the growing number of people choosing to do it their on their own.

Paul says:

If its impossible to tell, how come lots of real estate agents are being fined and licenses suspended every year? Bottom line is of course there are bad and good real estate agents. But either way the agent didnt pick you, you picked the agent. Do your research, get testimonials, and you will find the right ones. And if you feel like your getting screwed by an agent, REPORT them, the courts will determine weather they are in the wrong or right. Its up the the client to sign the final papers anyways, if you dont like the price its being sold for then dont sell it, hold out for more money; if you want it sold fast then sell it fast. the agent is merely there to assist you and guide you. YOU make the final decision. thanks 🙂

Teacher Man says:

What a ridiculous argument. Because many Realtors are caught breaking their own ethics laws this obviously means that Realtors have value? That’s ridiculous logic. It’s amazing how similar the arguments look on this thread and the one on Y and T about financial advisors. What I find most funny is the fact that both Realtors and FA will point out the other one as a profession that abuses the commission-based system. The bottom line is that whether a real estate agent is good or bad, their incentives will always be to sell the property quickly, and that the value they can add in today’s internet-based sales market is almost never worth the percentage anyone gives up.

Lorne says:

Exactly, terrible comparison. @ Bobby, don’t even get me started on lawyers, especially the expensive ones as they do whatever they can to increase court time so they can charge more fees. Stick to the discussion on real estate agents and stop trying to compare them to other professions.

vancouver 2011 says:

ok, so let’s say two of these less respectable realtors work on a deal. one as the seller’s agent and one for me as the buyer’s agent.
unfortunately i failed to notice that the person working for me was one of those ex used car salesmen with a shady past. my agent knows of course how much i was approved for. lets say 500k. i fall in love with a place which is listed at “only” 380K. so i want to put in an offer at …say 360k, my agent takes the offer to our seller and the two have a little chat.

and here is what i would like to know:
how do i know that the agent i hired really works in my best interest and doesn’t tip the sellers agent off to the fact that i could actually pay way more for the place than i offered?

a little wink wink and a secret hand shake later and my agent comes back now telling me that there actually was another offer (which of course there wasn’t , but how would i ever know since i am not invited to the presentation table) and we better up our offer a whole lotta more to get my dream place.
i am now of course emotionally totally invested in that place and gotto have it. i put my best foot forward and we come back with a 395k offer – et voila. the place is mine.
the next day the sign on the lawn says: Sold over asking!

the world is a village and one high school bully knows another one when he/she sees one.

this is of course only a hypothetical scenario but if it played out a couple of hundred times in a city like vancouver or the GTA wouldn’t it be a great way to artificially inflate housing even further and before one knows it, we have another contributor the greatest housing bubble not supported by any fundamentals other than greed and stupidity.?

any thoughts?

Paul says:

Vancouver 2011….Yes if that happened and they got caught the Real Estate agents involved would have broken the law and much of the Real Estate rules and regulations and they could lose there license, plus they could owe you a large sum of money for damages even if you found out 10 years after they contract was signed. Please feel free to go over the Real Estate Services act as there is plenty of Laws governing Realtors. I will leave a link below to the RESA.


Paul says:

I understand ALOT of you are upset with some deals that may have happend but keep this in mind when you think Real Estate Agents are over priced. First of all im 22 years old and currently a new Real Estate Agent as I have just recently finished my course at UBC`s Real Estate Division. Okay, well second… Most Real Estate Agents dont make that much if you think 7% even which is the absolute HIGHEST you can make on the first 100k and then 3.5 which is also the highest on the next 100k ect…. so lets take a house that is worth 200k which is low but just to give you an example the commision on that is only 10.5k now that is split between the buyer and seller so now its 5.25k to each of the Real Estate Agents, and now they have to give normally 30% to the company they work for meaning they give 1,575 back. So they made $5,250 and have to give $1575 back to Remax.. ETC. leaving them with $4182 for selling that home. Now some may say thats a really good wage for selling such a low priced home… BUT Real Estate Agents rarely get 7% on the first 100k and even if they did that 4k they made on that house will most likely have to get them by for a while. We dont sell houses every day or even every month, and on the best case senario that we do sell them every month its considered a “streak” and doesnt happen forever meaning that eventually we end up in a “slump” meaning that we dont sell for months or even longer! So that money is banked and is used to support our familys while were out trying to sell more houses. Moral of the story is yes commisions are high! but thats because sales dont happen all the time! 🙂 Just wanted to give you guys a different look on the situation and not meaning to offend anyone at all 🙂 Thanks so much if you took your time out to read my long and possible boring (haha) statement.


Teacher Man says:

Hey Paul, the problem for me is that when the money leaves my pocket, I don’t really care too much how much is going to the parent company and how much the individual agent gets to keep. To me, it’s $10,500 dollars leaving my pocket, and that’s a ton of after-tax money leaving my pocket. That sounds like a pretty bad compensation structure for you guys though. Good luck going forward, I can’t imagine real estate agents in British Columbia are jumping for joy right now!

Headplant says:

I came to Vancouver as a spousal immigrant from Melbourne Aus 3 years ago at age 54. In Melbourne, auction sales are quite common, and auction clearance rates (successful sales) tend to range from 50% to 80%, depending on the state of the housing market. Agents push auctions, sometimes because an auction may generate bidding frenzy, sometimes just because they are guaranteed at least an auction staging fee (only a few hundred bucks).

But get this …. when you sell your house, either by auction or by private sale (which means you set a price, but still generally use an agent) the agent commission should be no more than about 2% for a $1M house, and you can probably negotiate down to about 1.2%!!!!!

And if you are buying, you generally approach any agent you like, and they will show you any appropriate properties they have on their own list. You never NEED your own agent to buy a property.

I fail to understand why commissions are so outrageously high here in Canada. But it explains why there seems to be an agent on every corner!!!

Teacher Man says:

That’s a great perspective head plant, thanks for the comparison. I agree with your conclusions!

Oli says:

Interesting to see how commissions work in Melbourne! I wish it worked like that here. Buyers shouldn’t need to have an agent represent them… we should have a choice and instead save that commission $ to close the deal!

The only thing I don’t agree with is even paying 1.2% though. On a $1M house, that’s still $12,000! It should be a choice if I only want to pay for select services.

Paul says:

Teacher Man, Yeah for sure thanks, just to clarify that when you are a Real Estate agent there is a lot of Rules and Regulations including a Statue called the Real Estate Services Act. If any of you feel like you are being mistreated in anyway please report them to the Real Estate Council or the Board that they may be a member of, and there is very strict punishment, us Realtors learn all about the Real Estate Services Act, Rules, Regulations, and Professional Ethics in the Course and it is no joke they take it very seriously. Thank you all. 🙂

john says:

the real estate board is a joke in my experience with them.when you report and agent to them they in turn try to put the blame on you and that is fact as it happened to me twice over the years.

Marko Juras says:

Hi there,

I am a successful discount REALTOR

Raman Kainth says:

Great points here in the thread there are 3 courses here in Toronto. Still not nearly enough because there are still bad agents out there no doubt after all we all have the same license. The key is finding the right one who is honest and able to do the job. Yes we earn a lot of money but some of us actually earn it. On the other side check this out, if I advertise, put my money and time into it, work 60 hour weeks, deal with ruthless sellers and buyers that will make a grown man cry and then the property doesn’t sell. A lot of money and time was spent, we don’t get that back. Really after all of the cuts and expenses were left with a little portion of that percent. That is just one of the risks we take. Theres a lot more too it than is actually visible.

Closet Realtor says:

Maybe it’s your fault the property doesn’t sell – you should take some responsibility and take less commission!

I hope the 60 hour week you put in isn’t for the 1 property that doesn’t sell…

As for advertising, are you referring to the ad at the bus stop with your face on it? The best marketing you can do for a property is put in some nice pictures and a description on MLS. And of course stage it nicely, but any person with common sense can do that!

Fay Kelley says:

Well I pay for professional photographer, the home warranty usually on both sides unless I pay a commission to a referring agent, I buy a lot of refreshments etc to lure agents to both office and MLS broker opens, I pay premium for virtual tours, etc., etc. I have a LOT of money going out of my pocket BEFORE I sell, so I am not taking less that 6%. I have agree to do a variable commission on both sides but don’t like working both sides of a transaction and am going to discourage that during the future. By the time my broker gets a cut after I sell the property and then deduct my own expenses, there is NOT MUCH LEFT OVER ! I do a lot of open houses and spend a lot of quality time on my listings. I am not going under 6%. If someone wants a cut-rate realtor, go for it!

Teacher Man says:

Or even no realtor if I want to buy my own refreshments have my buddy take my pictures for me?

Miz Dinah says:

I have no problem with people trying to make a living, and realtors DO provide a service and DO have expenses. However, the percentage-based fees are ridiculous. You can’t tell me that there is more work involved marketing and selling a $600K home than selling a $300K home. Home prices have increased quite a lot in the last 15 years. A house that was $300K 10 years ago is now selling for around $500K where I live. The original commission was $12K and 10 years later it is $17K. For the same house, albeit 10 years older, and for the same level of service. Less, really, because of the availability of information on the internet that a homeowner can access on their own. I believe that commission rates should not be based on the value of the home, but rather on the value of the service and I support a flat rate or package-based rate.

Teacher Man says:

For anything financial-related I prefer flat-rate packages as well. Have you read Freakonomics by chance? That sort of changed the way I thought about the whole real estate industry in general.

Miz Dinah says:

Not yet but I should borrow it from my sister. I think it’s on Netflix, come to think of it. Flat rate is good for some things but for others I prefer to only pay for what I use or have the ability to customize a package based on what I will use.

Teacher Man says:

The long and the short of Freakonomics is that incentives compensation doesn’t always work how we expect. The conclusion was that realtors rarely get you the top price for your home, and certainly not enough to justify their commission.

Stephanie says:

We’re not all so evil, us real estate agents I promise!

I agree with Pete Shpak above me, as well; it is far too easy to become a licensed Realtor, and unfortunately a lot of people see it as a way to make “easy money”. The problem is, it’s actually a heck of a lot of work to be a good agent, and many agents aren’t looking out for their client’s best interest as they should (which makes the rest of us look bad).

Of course it’s entirely your decision, but I do believe there is a lot of value in hiring a Realtor. Included in the commission cost (for most realtors), are all the marketing fees, strata documents and MLS listing fee, but there are two other very important reasons why you should hire a Realtor to sell your house.

First off a Realtor helps you safe time. My checklist for things to do when selling a home is over 4 pages long, and the process can take some time. A Realtor can take care of showings, open houses and answer all questions about your home from other agents or potential buyers, taking the stress away from you. Not to mention all of the time marketing, and advertising your property to help it sell.

Second, a Realtor’s got your back. We actually follow a very strict code of ethics, with steep penalties for breaking them. Our duties and obligations are written in the listing contract, and by law we are required to promote our clients best interests and disclose all relevant information. If a Realtor is ever in breach of our code of ethics, they can be reported to their Real Estate Board. The board also has a public list of all realtors who have been in breach of these ethics, up for all to see for all of time (I strongly encourage you to look at the list before hiring an agent). We’re also very highly insured, in case someone ever goes wrong with the sale of your home. For instance, if the home were to sell to someone who later discovers the house was previously a grow op, and both the sellers and agent didn’t know about it…Booom! We’ve got insurance! There’s a thousand more cases where this is important, but with your most important asset, I just think it’s better to be safe than sorry.

As far as hiring a realtor goes to buy a house I think that one’s a no brainer, especially if the person selling their house has an agent. Without an agent representing you as the buyer, the sellers agent double ends the commission, and regardless of them writing up the paperwork for you, have NO obligation to you as a client meaning they are not allowed to help you negotiate a better price, because they’re working for the seller. It will save you money if you hire your own agent.

Lastly, just with regards to the actual article. It is well written and mostly true, however all agents are allowed to charge whatever they like, the brokerage doesn’t choose the commission. I’m with Macdonald Realty and personally I charge 7% on the first $100,000 and 2.5% on the remainder, which I will point out, after I split commission with the buyers agent, my brokerage and my marketing costs, a sale which can take up to 6 months will only actually earn me around $5000. Don’t think that’s so outrageous after all. And as a rule I will never discount my commission rate (except if I’m working with someone to both buy and sell a home, in which case I drop it to 6%), because I believe my services have value, and I like to have food with my meals. If an agent isn’t willing to negociate their own value, how do you think they will negociate the value of your home with a buyer. Never hire a push over agent.

young says:

@Stephanie- Thanks for sharing your 2 cents and clarifying! 🙂

LD says:

I actually had to report my real estate agents (husband and wife team), the listing agent and the brokerage for breach of ethics (they were all in cahoots) involved in a purchase of a home. The agents were judged by a group of their peers! Are you kidding me? They were all fined (not heavily) and got a minor slap on their hands…and I was not compensated whatsoever (problem not satisfied – nor compensated monetarily). I suffered a nervous breakdown as a result of this inquiry and situation and couldn’t proceed with a proper lawsuit in court. My opinion is that the lawyers actually do the work required in ensuring that you’re protected and that your best interests are looked after with regards to “the biggest purchase of your life”. The lawyers only make a pittance compared to the agents in real estate transactions. If it wasn’t for my lawyer (who I paid less than $1,000), I would’ve lost $450,000 instead of the $50,000 I did. Agents do NOT have your best interest at heart…they have their OWN best interest at heart. There is no incentive for them to do anything but look after themselves.

I have bought/sold all of my other properties on my own with the assistance of a real estate lawyer – all have been a great experience and a win/win for me and the buyers involved.

I think some profound changes need to be made in regulating the CREA/MLS/Real Estate Brokers & Agents in Canada and it can’t happen soon enough.

Teacher Man says:

Wow! Thanks for sharing that experience LD. That is very enlightening and definitely reinforces my instincts and minimal experiences. I think in terms of the real estate market, the world is getting flatter in terms of information advantage, and the value of a “real estate expert” is not highly questionable. If you spend a few hours reading, and then make the effort to list your home on your own terms, the benefits are well worth it in my opinion.

jm says:

when you pay a realtor for the sale of your home, be it 8000 or$ 20,000,that is money the home owner no longer has., and realtor always talk about what they pay out and that is money they get on one sale more or less. news flash,overhead is what you pay when in business for yourself. i grew up in commission sales and i`am 70 years old going door to door and that is the hardest sales you can do its called, cold calling,so please don`t say your first interest is to the home owner because it`s not, it is yourself first,then the company next then the home owner. you don`t sell,you don`t eat,and that is commission sales. ps,i sold 4 of my own houses and it was not hard. if you can do a bill off sale for a car you can do one for your home a lawyer does the rest and look at that money that you just saved.

Closet Realtor says:

@Stephanie – Just because a deal takes 6 months to close, doesn’t mean that high commissions are justified. The agent isn’t exactly working full time 40 hours a week * 6 months on a deal and only getting $5000. On the contrary, maybe it’s the agent’s fault that it’s taking so long for a property to sell? They should actually give the seller $ back!

Next, the only marketing costs that consumers are paying for are bus ads, postcards and fridge magnets for realtors to market themselves to other clients. Most places only takes some common sense touch ups to sell, as long as they’re priced right and put on the MLS for buyers to see.

The root cause of all this is that the system is flawed. The low barrier to entry into the profession creates too many realtors. There’s just not enough to go around for most agents.

In the end, a small % of realtors reap the profits, while the masses suffer.

However, remember it’s the end consumers (buyers and sellers) who pays for this skewed reality. And why should the public pay to support this incestuous industry?

Eddie says:

Standard talking points from a realtor. True: Not all realtors are bad. However the industry on a whole is undereducated and vasty overpaid for what they do. There is also a great deal of opportunism for commision with little actual regard for the clients at time. Do i trust a pilot to fly the plane? Yes because he’s had 10,000+ hrs or flight training and experience. And that brain surgeon has about 12 years of schooling and work experience before he cracks into your skull. You guys take a couple 4 week course and write a test and you consider yourselves highly trained professionals. The vast majority of buyers and sellers out there wouldn’t be so insenced by your profession if it wasn’t ridiculously overpaid. The entitlement here is obsene. I’ll get my own coffee and save the 12K. Thanks though. Best Regards.

young says:

@Eddie- LOL “I’ll get my own coffee and save the 12K” That’s exactly how I felt! Honestly, for me, I know too many realtors who were my classmates from high school and they were into drugs/ looking cool/ clubbing/ gangs. And now they’re realtors. They took like a 1 month course and passed the exam and now they are realtors.

of course that being said, there are lots of realtors out there who work for that money. I’m just saying there are more bad apples than good ones.

Pete Shpak says:

Realtor Pete here again…

I have a big problem with how easy it is to become licensed (I know better than anyone… try working with them all day in and day out!). I personally have gone beyond the trading services course and have my Managing Brokers License and I also have a Commerce degree in Urban Land Economics from UBC.

Picking the real estate agent to represent you is 100% your decision. There are lots of us who work hard and save/make our clients a lot of money/time… and eliminate a lot of confusion and stress (as well as buy coffee (and more) for our clients).

Being an open market to select your own realtor, I have to put some blame on the picker… not just the pickee. Ask for testimonials and experience to date… peer reviews are all over the net, go with someone proven!

When you are making -most likely- the biggest investment of your life you will benefit from the guidance and experience of a top class realtor! I promise 🙂

Paul says:

well said !

Raman Kainth says:

sorry one more thing too add….Here is the owner of FSBO.com, lol he got caught using a Real Estate agent to sell his condo.


young says:

@Raman Kainth- Thanks for sharing that link- looks like an interesting read!!

Raman Kainth says:

Honestly saying you guys are right it does look like a big waste of money but let me ask you a question. When you fly a plane would you question the pilot’s salary, how about a doctor whos doing brain surgery, how about a lawyer fighting for a very important case. Would you go and cut your own hair? Why would you play around with the biggest investment of your life, even though real estate agents make a lot of money all of the access is through a real estate agent. How many people buy a house of a $30 add or privatly it is just by luck and it is very rare. You may sell it yourself no problem but your leaving a lot of money on the table and your attracting unqaulified buyers. When you go private you are bargaining with emotion and that is never a good way to bargain. Why not interview agents, see which one is the most powerful and hire he/her. These sities FSBO.com or whatever may look good but unfortunatly in todays high inventory market where 1 out of 12 homes that are listed are actually selling, the question should not be how much do you charge but what will you do to sell my house?

There are agents who charge 1% or $999 you guys don’t have a clue what kind of scam your in. At the end of the day you get what you pay for I am just educating you guys so you don’t make the wrong decision. Those guys will come in and tell you just what you wan’t too hear and they won’t even give a hoot about your property even if it doesn’t sell. First things first they are not going to care about your property, they weren’t strong on their commision in the first place, how strong could they possibly be at the negotiating table when it comes to your price they are going to do the same thing discount your price. If you were at work and your boss all of a sudden said XYZ my factory is very important too me, I put my life savings in here but I am only going to pay you a qaurter of your pay this week how hard would you work? Same concept, they are just going to pick up buyer traffic from your house and then they could make that buying side commision 2-3 times depending on how many times they sell a house to a buyer. 99% of the time when somebody calls of an add they don’t buy that house, they are just shopping around. You definatly want somebody whos honest even if it hurts a little bit and unattatched to the outcome. Don’t worry about the commmision worry about the net.

Sorry for the long post I felt I needed to educate before anybody makes the wrong decision thanks.

Source? I am a realtor lol…

young says:

@Raman- Thanks for the post 🙂 You do make some valid points. To be honest, I think it really boils down the the real estate agent you get. There are some good ones and there are some bad ones. I know that all the “social yet bad kids” at my high school became realtors by taking a short course. There are agents who can get you over and above what you have been asking for and there are some who don’t do anything but let it sit on the market until the contract ends.

To me, the reason why FSBO type sales don’t work well is because realtors who are bringing their clients around are not interested in looking at homes with FSBO. There aren’t enough people doing it collectively.

Thanks for stopping by and sharing your two cents 🙂

PointMade says:

Ramen — Of course there are some realtors that are worth it; however, a long rant containing numerous spelling mistakes, incorrect/incomprehensible sentences, and no organization does nothing to help your case. Basically, you just proved the point. No, I wouldn’t question my doctor or pilot, but I also wouldn’t hire a realtor that couldn’t spell sites.

Marilyn says:

ha! good point.

Closet Realtor says:

Exactly! I hate it when Realtors compare themselves to other professions that take years and decades to achieve. It’s obvious that the low entry requirement makes it easy for people who can’t even spell to get through.

Disclaimer: I’m currently doing my real estate license in order to launch an online service to disrupt the industry.

The knowledge being covered in the licensing course is mostly breadth instead of depth. Realtors are only required to know about the bare minimum. The textbook usually contains a caveat that states “we expect licensees to know about *xyz” but it’s best to advise clients to consult with professionals like lawyers or home inspectors”

In other words, just be complacent filling out forms for clients but make sure you cover your asses!

Jesse MacDougall says:

Hey bud Im a CA involved in online marketing and real estate. I would b e interested in chatting with you about your online service. How can you be reached?

Lorne says:

Raman, not sure what market you are in where the inventory is high but if you’re in Toronto area where the Avg Days on Mkt was 23 days in April, then that’s even more reason for sellers to demand a lower rate from realtors. The problem with realtors today is that they are doing the same job they did 10, 20 or even 30 years ago. Now think about how much houses have appreciatied in value in that time. Friends of mine just sold their house for $100K more than they paid for it 3 years ago and what addtional value has the selling agent provided to justify taking a larger chunk of their appreciated asset? ABSOLUTELY NONE. And if houses are selling in less than a month, then they really aren’t doing anything to influence that speed of sale.

Please, don’t compare justifying an airline pilot’s salary to a real estate agent. A pilot has a highly specialized skill set which demands years of training and experience and they are far and few between. The Toronto Real Estate Board (TREB) has over 36,000 licensed agents, 10 years ago it was half that amount. This is another reason rates should be cut. Supply far outweighs demand and this in turn would be a good thing for those agents who actually do this full time for a living, as it would weed out a lot of the part time, weaker agents who have no business being in the business. For now, you can’t swing a dead cat without hitting an agent in Toronto and there are very few who can honestly say they will do a way better job then the next and hence, that is why people look to 1% or Flat Fee Realtors.

Calling You On It says:

Your analogy is way off base.

Using a 1% realtor is not the same as working for 1/4 of your salary. The 1% realtor knows ahead of time that he is getting less than extortionist fees for his work – that is what he signed up for. The problem lies on the other end where the purchasing realtor will not want to deal with the 1% realtor because even though he may be able to get a cheaper price for his client (as the seller may be able to move on price in the absence of huge commissions), there isn’t the economic motivation there to have the purchasing realtor best serve his client before he best serves himself.

Your other analogy, about checking the Pilot’s salary – the pilot of a commercial airliner generally has years of training and works their way up to the position with thousands of hours of flight time before getting in the cockpit. A brain surgeon would have a decade or more of schooling and years of practice before attempting their first solo entry into someone’s head. A real estate agent in this city takes a correspondence course and 30 hours of classroom training.

Comparing a real estate agent to a brain surgeon is like comparing the back-up third baseman on your kid’s little league team to Mariano Rivera.

And here is what gets people; if you are able to sell 2 average houses a month here, working perhaps 20 hours a month, you will make more than a pilot – even after splitting the commission 50-50 with the other agent and giving 30% back to your agency.

This is the reason why 1% realty is so hard to work with. 7% realtors refuse to sacrifice their side of the commission for to satisfy their client’s needs. It is a conflict of interest that wouldn’t be tolerated in most other industries but because realty has such a low bar for entry (unlike pilots, lawyers and doctors) that it is hard to find quality people in the mass of profiteers.

My suggestion is that if you some how luck out and find a good realtor, negotiate their fee directly. Sell my house for X amount of money, not the % system. If they do it, great. If not, then keep looking.

Kyle says:

I like that sort of upfront fee-only system.

Bull says:

Raman, thanks for the “education”. Just to be clear though, you’re suggesting that realtors are every bit as highly educated and trained as pilots, surgeons and lawyers, right? “definatly”

Oh sorry, that was a copy-paste from your post. What I meant was “definitely”. Must be that education thing.

Now I know first hand that pilots don’t get paid like realtors. In fact, only when they get into the “big birds” do they receive a decent salary and it pales in comparison to what many realtors pull down, AND they have to work for it.

Brain surgeons? A fair comparison I suppose. If you’re in need of one. Anyone else would probably see there’s a bit of a gap there.

And lastly, lawyers…. really? Lawyers? What kind? Like…. DIVORCE lawyers? Well, maybe them. But true professional lawyers actually have to go to school for just a wee bit longer than your average realtor to be able to make the money they do.

Oh, and wait… I forgot to mention the recurring training, fitness tests, stringent laws governing actions, and severe penalties including loss of chosen profession if these other realtor-equivalent professionals make even the tiniest mistake. So you’re saying as well as the education equivalency, realtors also abide by these same high standards, right?

Yeah, I see it every day. Now that I’m edumucated. Thank gawd you guys aren’t flying the planes!

Tina says:

Sorry but your comparison is a little offside. I would never question a pilot, doctor, lawyer. Do you know how many hours and years it took them to earn that profession? Do you know what a realtor had to do? Well they read a thick text book and wrote an exam with only a 60% passing grade required. They also had a year to complete it but I’m sure most write it within a few months. Your welcome.

You do have other great points. There are great realtors but unfortunately the majority it’s bad and the good are few and far in between. I personally have used one and was quite disappointed. He promised me a cash back of $1500 off contract and after my place sold in 6 days all I got was a $100 sephora gift card. And him claiming he never offered the bonus.

In my opinion I saved a damn long time to buy a place and I sure as hell will not late someone take a chunk of my years in savings for some paperwork. I know better now I can use realty.ca and also list myself with a small fee. I have a great lawyer and I don’t mind doing some of my own leg work.

canadian coupons says:

One thing I’ll always remember my real estate agent doing is always bringing me a warm Starbucks coffee when heading out to look at condos. It’s a small gesture, but memorable.

young says:

@canadian coupons- Wow, if I had a realtor like that I would use one LOL.

Pete Shpak says:

don’t bite me head off here… I am a realtor in Vancouver and I have been doing it since graduating university in 2005.

Being a realtor is a tough job. Many people think its easy and we don’t do much. I think the big problem is there are a lot of ‘bad’ realtors out there, that give the good ones a bad rep. Getting licensed in BC is a little too easy in my mind.

I work very hard and I know many other hard working ethical agents in Vancouver that earn their money. A good agent will net you more money than a FSBO… and when hunting for properties with the right agent you will find deals that most people will never come across.

Anyway… some realtors are Great… I promise!

young says:

@Pete- Hi Pete 🙂 I’m not going to bite your head off. You are right- as with every professional there are good ones and bad ones. I will have to agree that there are a lot of “bad” realtors out there. I know some real estate agents who were previously wannabe gang members at my high school, even!

Gary says:

I’m also a Realtor and have been one since 2012. I agree with Pete. I’ve seen and heard of a lot of shady things in the business. There are so many different types of Realtors too. Some really care about their clients and some just care about the money. It’s an extremely difficult industry but before entering this industry, I did my research and made my mind up to do it the ethical way (following all the rules that we are taught). I’ve had a client where I really didn’t really do much work to get the commission whereas I had another client where I went through tonnes of research, analysis, saw over 50 homes, wrote several offers for different properties, read tonnes of documents to get the deal. I’ve had a client who bought within a few weeks, and I have a client who may not buy for another 2 years. My advice and personal opinion for non-Realtors, just try to find a really honest and ethical Realtor. They are out there.

ive always had great experiences with my realtors!

young says:

@Canadian Coupons- Good to hear. Do you have any examples of how they shined for you?

Andrea says:

Obviously any negative replies are from people who are NOT realtors. If you dont know what your talking about especially when it comes to the competition bureau – why comment. What do you do for work, could i just walk in and take over your job.

I have sold my latest house without an agent and I can only tell you how I made 19K in my pockets!

In my opinion, anyone who is willing to take a few hours to make decent comparables, put a few hundred bucks in home staging and take a few hours to take good pictures can save the commission.

website like bytheowner.com is awesome!

young says:

@The Financial Blogger- Thanks for visiting! Yeah, exactly 100% agree! I heard that there will be very BIG changes to the real estate market once they open up posting on MLS.ca for people who are NOT real estate agents. That will change the way people use real estate agents for sure! Hopefully it happens soon.

Dd says:

Don’t stone me for what I am about to write–but I think the commissions are fair *I’m not joking*

I feel people understand this career and base their judgments on it with emotion generated by money and limited understanding. Much like a person who bet on a football game and watches it from his couch. Before you know it, ever penalty the team gets is a “bad call” by the Ref.

It is one thing to be outside looking in and a whole different thing to be in the game–I would bet a lot more is involved than our view point provided from our sofa can provide.

But I will agree with the housing prices being too high!

young says:

@Dd- lol, I promise I won’t stone you =) (how graphic, Dd!). Hey, are you a closet real estate agent by any chance? Yeah, I’m not saying they’re UNFAIR, but in some certain scenarios, I find that the work they put in isn’t worth it (like the brand new condo situation). Then again, a lot of real estate agents have to suffer through doing cold calls, hold open houses, try and contact people who might not be interested in using you anyway. It takes a lot of guts and a sales person mentality, that’s for sure.

Yakezie says:

The commissions are atrociously high!

Should be more like 2% or FIXED FEE period!

young says:

@Yakezie- Yeah, especially for markets like Vancouver and SF, where the prices are already ridiculously high to begin with!

Commission is WAY overpriced! Not many are customer focused either. It’s really a monopoly.

We used 1% Realty to sell our first place and we hardly saw any of the big name realtors since the commission was lower. It was our first experience since we bought new from the builder. We bought our second place new but to sell and buy the next one. We picked a good realtor. The problem is that the good realtor usually work as a team and not all of the realtors in the team are the same …

You need to do your homework and NOT rely on a realtor for your decision (sell or buy). Buying / Selling a place is very emotional and the realtors can play on that. Realtors should be a tool in your toolbox so you need to do your homework. I have found that some realtors are good for shopping, some are good at selling and some are good at negotiating a price. Based on your need, change realtors. The realtor you use to buy a place may not be good at selling your place.

If you don’t have experience, I recommend you have someone with experience tag along. A 3rd party will keep everything in perspective because it’s not their place. They have no emotions involved and it can help balance what the realtor says and what your emotions tell you.

Maybe I should start a side business and offer services to not get screwed by a realtor and charge a slight fee 🙂

young says:

@The Passive Income Earner- Yeah! Great idea! I’m sure there’s a HUGE market for there here in Vancouver (huge!). There are just way too many real estate agents out there who shouldn’t be there. I remember going to an open house this summer and the real estate agent showing the home couldn’t answer how OLD the house was!!! She said (as she chewed her gum with her mouth open) “I dunno… it’s old. An old timer” and she didn’t even offer to look it up lol. That’s a great idea you have, to have someone as a 3rd party… you’re right, buying is such an emotional decision, and it’s hard not to be rational when you want-it-so-bad!

Recently, many people are doing the FSBO approach.

I have also seen a local agent do a 70% cash back.

That industry is going through a major change. I am not sure where I stand on the fees charged – it would be great if it was a per hour charge for some people.

young says:

@Steve Zussino- Yeah, I’m glad things are changing. I’ve been looking on the FSBO sites, and find that they aren’t that updated. I find that there are good postings for places that are more rural in BC (like on the island, or up north) but for Vancouver, I don’t really find too much. Wow a local agent do 70% cash back? Now thats what I’m talking about!


Actually you can list with duproprio.com and a couple of other sites. I don’t know if this one operates in BC though.

For buying, you can have an agent tagging along since you won’t be directly paying but for selling, no way jose!

My first condo was found by my wife and my current house was found by us. Agent never contributed any meaningful results.

young says:

@Beating the Index- Thanks Mich! I checked out duproprio, and I think it’s the Quebec equivalent of the FSBO sites. Duproprio looks like there’s a lot of activity. I actually am not planning to use an agent for buying. Our strategy is to use the selling agent and do a dual agency agreement so they can cut their commissions.

Tiny Potato says:

I fundamentally believe that realtors (especially on the buy side) don’t add that much value.

If you are buying, not using a realtor may provide some wiggle room at the end, when the negotiations get close, you can hold firm at the end and get the realtor to cut a bit of their commission to make up the few extra K. This only works in slow markets (which Vancouver appears to be entering).

Another thing look out for…I’ve heard stories lately of the selling realtor mentioning that they are “expecting other offers to come in”. I think this is a tactic to get the potential buyer to up their bid price (since Vancouver had a strong market last year where people competed for places). If the buyer doesn’t make an offer, the selling realtor calls them back and says the “other offer fell through”. It all seems a bit shady to me.

I’m hoping Vancouver crashes…some greedy people deserve it..!

young says:

@Tiny Potato- I’m in the same boat- I’m hoping Vancouver crashes too!! You know what is really shocking?? Realtors have been taking their clients to NEW CONDOS that haven’t been completely finished yet here. Talk about EASY MONEY!! I was looking in a new condo a year ago and the developer told us that they would give us the “developer” price if we didn’t have a realtor with us. Imagine if you had a realtor, you basically are giving away a couple thousand grand for them doing absolutely nothing!

I haven’t heard of that tactic before- that’s actually a terribly seedy disgusting tactic!! Some selling realtors have told us that (actually, come to think of it) most real estate agents we have dealt with when actually putting offers in told us that. That’s why it’s important not to sacrifice or “fold” under pressure and stick to the amount you were thinking of initially. I ain’t interested in bidding wars, yuck!

Realtor says:

Really no value on the buy side …. yeah ok …. An experienced agent knows houses and can see potential issues that a buyer cannot see, the agent can also better protect the buyer in the sale with clauses and terms. I had a couple come to me to help them, they bought on their own without a condition on their contract and wanted out. Yeah should have could have!

SavingMentor says:

When we purchased our first house we went the private sale route and found a nice house that we liked while we were driving around checking out various neighbourhoods.

We actually hesitated on the house for weeks and then contacted the sellers again after much discussion. It turns out that they were just about to list the house with a real estate agent and we got in under the wire. We negotiated on the price quite heavily and were able to walk away with a pretty big discount. It was win/win because they didn’t have to pay the commission.

Thanks for clarifying exactly how the commissions break down. I think it is pretty similar to that here on the east coast. Realtors definitely seem to protect their own by avoid those properties that are private sale or offer less commission … or maybe I’m just jaded.

young says:

@Saving Mentor- Private sales sound like the way to go. You were so lucky you found your first house while driving around! I wish I could say the same. This house hunting ordeal has been going far too long and is getting depressing. I love win-win! Commissions can eat up so much of the house cost (for both parties).

No, I definitely don’t think you’re jaded, you’re RIGHT! They likely don’t show you the properties that are for private sale because there’s less incentive for them. It’s too biased. Just like bias that is intrinsic when you choose a financial adviser and they give you mutual fund products in which they would get the most commission out of *SIGH*!!!

Realtor says:

We don’t avoid them – most sellers will work with us anyway . The problem is that it is typically twice the work when you are dealing with an emotionally attached seller that doesn’t know what they are doing. AND yes those sellers makes themselves mistakes that also cost them alot of $$$ – Love dealing with them actually because i can always get my buyers a better deal from an un represented seller!

rant open.
Real Estate Agents or might I say rip me off agents. I have only sold once with a real estate agent, that person didn’t do anything I am not capable of doing myself.

Never again! the next time I wish to sell, i will do it by myself. What a waste of money those commissions are.
rant closed.

young says:

@Beating The Index- lol Rant Open and Closed. Rip Me Off Agents LOL. Yeah, BF and I are currently NOT using a real estate agent, BUT there is one who decided to tag along and send us automatic info on townhouses that isn’t appropriate to our “wish list”. The problem with doing it yourself, is that MLS is funded for primarily by the real estate agents. The only place you could list (other than craigslist or facebook lol) is for sale by owner. Not many people look and list there (I’ve eagerly tried to find something on there to find out later it was outdated by a time period of about 3-6 months). I wish we didn’t have to use real estate agents at all either. Agree that those commissions are a huge waste of money, especially if your property was >1million or something! They make a killing!

john says:

if you list with property guy`s ,they can get you on the mls listing for a small fee.hope this helps.

Realtor says:

True, there are a lot of discount agents and companies out there that offer you the exposure but….. they are not all the same. I recently helped a client list and sell for thousands more than they would get on their own! THOUSANDS more than they would have saved, there are situations where you need a pro to get the sale done right!

Truls says:

Even if you sell your house your self you can still list your house on MLS.
Courts turned that over few years ago when MLS listing site become available to everyone including sell it your self guys.
You do pay a fee but the website is available to everyone.

Realty Investor says:

I Buy properties regularly and would never buy or sell without a Real estate agent. In Ontario the typical break down is 5-6% with half for Buyers agent and half for Sellers agent. My Realtor earns his keep. I consider myself pretty sharp but some of the clauses and conditions he has used in our offers are things that wouldn’t have crossed my mind. Having a professional negotiator with Market knowledge and errors and omissions insurance is the only way to buy. I have gotten to know my Guy pretty well so last time I listed a property I challenged the commission rate. He broke down his costs for me. Showed me his listing spread sheet. Although he makes 2.5% he averages 1-1.5% in expenses (says higher end listings are more profitable). All of this pro-realtor business aside from my experience not all realtors are created equal. Find One that is knowledgeable, hard working and trust worthy. Take your time searching. there are goods ones out there even if they are hard to find.

Rip Offers says:

Unless you’re getting a hefty cut in your realtor commissions, there is no way on gods green earth that realtors are worth what they charge. An average house in an average market for a $15,000 to $20,000 commission. You’ve got to be kidding.

Dan says:

I used to live in England and I remembered they charged 5000 pounds = $7000 flat fee to sell your house. That is quite reasonable. I mean, the guy only have to come open and close the door, print out the pre-made legal document for you to sign. There is no much of a challenge for the job really.

Rachel says:

Realty Investor sounds like an agent or a friend of an agent. For legal clauses, it’s best to show your offers to a lawyer. The lawyer’s fee will be significantly lower than a realtor’s fee. And most realtors use this line about negotiating skills. In reality buyers agents are working for the seller (while the buyer is actually paying the fee..in what other industry does it work that way?) and often they collude with the seller’s agent because they are interested in a quick sale, not the best interests of the buyer. Canada needs a good book to be written on the topic of all the tactics used by agents! (plus a whole whack of lawsuits because the industry regularly violates antitrust laws in every way possible)

Truls says:

Here is the way I do it. Bought and sold 40 homes in my life so far and still working on it. i find the house my self and look at it. After decided to buy it I go to my lawyer and he make the offer to purchase. Yes a Lawyer can act as a real estate agent like it it or not but they can. Very few know this.
If the deal is made then my lawyer get 50% of the real estate commission. I pay NOTHING in legal fee because usually the Lawyer makes more this way then if you used a real estate agent and then hired a lawyer to close the deal.
The real estate agent get pissed of and I laugh all the way to the bank. No legal fee or closing cost. 50% real estate commission to the Lawyer covers everything.

thatisawesome says:

thank you. that is genius.

Oli says:

Truls – To put in the offers, did your lawyer draft special contracts or use standard Realtor MLS forms?

Jesse MacDougall says:

WOW! Thank you for posting this. This is genius. I will do be doing this

Lawyer fees are pretty inexpensive. Typically $1100-1400 around the Greater Toronto area. So what you are saying is on a 500k house for example (2.5% split) -> $12,500. You are giving your lawyer $6250 instead of the $1300 that they normally charge?

That is horrible math, find yourself a Realtor that will give you some cash back instead and pay your lawyer the going rate.

Also, look at the big picture. The net cost of the property. If you are actually working with someone you really trust that has your back, the $6250+$1400 ($7650) that you “saved” may look like a drop in the bucket.

How about in a hot market like the GTA? Is your lawyer going to follow you around everywhere and type up offers on the fly so you can submit them? Is your lawyer going to get you into new listings at a moments notice? Could you lawyer be bothered to wait around with several other agents (Some homes in Toronto have 10-20+ offers).

While your idea sounds “genius” there is really much more to the story.

Also, on the of subject of dealing with private sellers. It does not scare me one bit. It impresses my clients that I care enough to bring them into any possible option. With some exception, private sales without representation give their homes away, I will without a doubt gladly work with them.

Two similar homes on Harewood Av in Toronto. The superior one sold for 515k on ComFree in 35 days (the buyer was represented by a Realtor, so they likely would have paid a commission anyway!). The one listed by an agency sold for 553k in 11 days.

Both sales within 24 days of eachother.

People can believe what they want, but these are recent sales within the last 5 weeks.

Good luck everyone!

Kyle says:

Michael, you provide one anecdotal example. How do you refute the data collected in Freakonomics for example?

You are very welcome to send me a private message, I will gladly share some hard data from the board with you. This kind of stuff happens all the time.

Another example from memory. 1% Realty took 46 days to NOT sell a home on Brimorton Dr in Toronto. It was a vacant flip home, so they likely incurred other expenses while trying to save money (interest, property tax, hydro). The home owners gave up, hired a popular brokerage in the area and it sold in 3 days for more $ than 1% was even asking both times they tried to list it.

I also have a very rare example where a seller on ComFree sold in for a fantastic number in 30 days. A very recent sale. The seller did very well in my opinion (and no other agents were involved, so they saved a bunch) The sellers likely received 30k more than they should have.

What!? I am a Realtor and I practically just gave Comfree a plug!? Well, sort of. While this particular example shows great success for the seller, it now shows an example of where an unrepresented buyer paid way too much and will likely have to give up an extra year of after tax income in their working life to pay up the difference.

I believe FSBO style companies generally sell false hope as that home was more of the exception and not the rule. It puts a thought in some minds that they are saving a mint. Once they sign up, they are motivated to stay the course, but in the end it turns out to be more hard work with a lower net result.

I have never read Freakonomics. I have been too busy with my real estate business by giving out great deals on listings, honest/sincere advice and awesome service. I will look an audio version of the book.

I am not handing out typical “brainwashed” style realtor BS. My anecdotal examples are based on reality that I see.

I encourage and appreciate good ideas and examples of saving money. Out of the box thinking, wheeling and dealing can get people financially ahead.

As a child, I grew up in a one income rental household with 4 dependents and no car. We got by with the basics, we did not have much. I started working young and I learned the value of a buck. Besides several successful little business ventures, I completed an apprenticeship and worked as a Licenced Electrician for many years, and worked my up.

I encourage people to spend wisely and I am all for people saving money in whatever way they can. Though in some instances people need to educate themselves a little better, as there is obviously more to the story then having a lawyer write up your offers and split the commission 🙂 I am sure there would be a conflict of interest in there somewhere, and I cannot see why a good lawyer would be involved in that.

I disagree with people being served a dish of false hope from any source with unknown motivations (general ego boosting, financial gain, book sales, etc).

Good luck everyone, however you choose to buy or sell your home. It won’t offend me either way, just educate yourself and don’t eat up false hope. Cheers!

Kyle says:

Michael, you seem like a real stand up guy and thanks for bringing your thoughts to the site. Here’s the thing though, even though you have a substantial amount of experience in the field, your anecdotal experiences are still just anecdotes. For advice to approve to Canadians in general it needs to be broadly provable – or else we’re just arguing opinions right?

Please check out Freakonomics and get back to me. It basically looks at a large data set and proves that real estate agents have a massive incentive to sell houses quickly as opposed to getting the most they can. I won’t go into more details on just how they prove this – suffice it to say that the book is a massive bestseller and has been reinforced by academics from around the world.

oli says:

Here’s a good 2 minute Freakonomics video illustrating problems with the real estate industry:


oli says:

I looked into 1% before, on paper they look decent. But they have this policy where you’re only allowed to give a flat $3000 to the Buyer’s Realtor and that fee has to stay a minimum of 30days.

What this means is that most Buyer Agents will try to negotiate more or some may flat out avoid your listing. Unless you have very interested Buyers who pushes their agent or multiple offer situations, most likely, you will have to pay the Buyer’s Realtor their ‘prevalent’ rate – which is 1-1.5% of the sold price.

We usually offer 1% and get plenty of showings/offers.

Hi Kyle,

Without even reading the book, I already know where the book is going with that statement.

Kyle says:

Fair enough Michael. What tips do you have for separating the wheat from the chaff when it comes to finding someone who will really put in the work as opposed to just working to convince you to take the first reasonable offer that comes along?

Real Estate 101 says:

There is a lot of debate on this subject and Michael, I think you nailed a lot of the pros. Something I don’t think all people understand is that real estate agents attend collage in order to get their license. I had to take 7 exams to be come an agent and I learned things I had no idea were expected of agents.

Real estate agents definitely get paid a lot if you look at single transactions but what people don’t see is how often we work and get absolutely no remuneration. This means showing people 50+ homes and then they decide that they want to wait a bit. It means calling hundreds of contacts to let them know about a new listing you just posted on MLS. It means networking, emailing, texting people all day. There isn’t “holidays” or “9-5” or “weekends” for good agents.

The fact of the matter is, you have no idea how much you “saved” of you don’t have access to sold data. Everyone knows what homes are listed for and sometimes you can see how long it took to sell but what you can’t see is what the market value is. That involves looking at sold data, days on market, what was sold by the owner and what was sold by the bank. It also means looking at easements and stigmas such as grow ops and seeing what homes were “flipped” and how long that took.

Everyone thinks they can do it themselves because they have no idea exactly what goes into the transaction. Although I’m sure some people are more adapt to this industry, if you are that good and we make so much, why isn’t this your job?

Violetta says:

Do you live in Ontario? Is the the house listed on MLS already that you look at? Who’s listing property? Owner or Realtor?

Sarah says:

Don’t believe you. A lawyer can spot a dodgy clause for an hourly rate that is far less than a commission. If you were an actual real estate investor, you would know this.