Selling A Home In Toronto

How Much Commission Do You Charge To Sell A Property?

One of the first questions potential clients want to know when they contact our brokerage is, how much commission do you charge to sell a property? Now, there is not a “one-size-fits-all” answer when it comes to real estate commissions. However, we will do our very best to outline our Fox Marin commission structure and the various service packages we offer here!

In Toronto, it is commonplace for a seller to pay a 5% commission on their property’s final sale price. Typically, the commission is evenly split between the listing agent and the buyer’s agent – 2.5% to the listing agent and 2.5% to the buyer’s agent. All amounts set out as commission are payable, plus applicable taxes (HST) on said commissions when the transaction closes. Real estate commissions come out of the proceeds of the sale.

How Do Real Estate Commissions Work?

There are three ways to structure a commission payment:

1. Percentage of the sale price
2. Fixed dollar amount
3. Combination of the above

Many consumers believe that real estate agents are overpaid. And, in many situations, they indeed are. If your listing agent is only installing a lockbox and printing out some listing sheets at a full-service commission rate, you are likely overpaying for their work. A real estate broker should be earning their commissions with a commitment to sell your home for the highest and best price possible, using all the marketing tools at their disposal. Thus, it is essential to understand what your listing agent is willing to offer you in terms of value, experience and services before formalizing your working relationship and your fee structure.

What Is Included In Real Estate Commissions?

To be fully transparent, at Fox Marin, we offer two different commission packages to our sellers. In most cases, we structure our commission as a percentage of the final sale price. This is how we break down our services as a point of reference:

1. Fox Marin’s Package A: Full-Service Package | Full Commission

Includes

• Property staging and styling (indoor/outdoor)
• Professional floor plans
• International and domestic advertising
• Professional photography
• Professional videography
• Staging lighting fixtures
• Property website
• Social syndication and paid sponsored advertising on Facebook & Instagram
• Digital and print marketing

Calculating Commissions

Breaking It Down Using Dollars & Cents

It also may be helpful to you to understand how real estate commissions breakdown using an example:

• Property’s Final Sale Price: $850,000
• Commission Rate: 5.0% + HST = $42,500 + HST > $48,025

Often the assumption is that the listing brokerage which sells your property will pocket the full $48,025. However, this fee (though it may appear lofty) is the listing brokerage’s gross commission, not their net commission. Remember commission is generally split evenly between the listing agent and the buyer’s agent:

• Listing Agent’s Fee: 2.5% = $21,250 + HST > $24,012
• Buyer Agent’s Fee: 2.5% = $21,250 + HST > $24,012

Are Real Estate Commissions Negotiable?

Yes, they are! And as mentioned earlier, one size does not fit all. If you are not interested in paying full commission rates, you have every right to seek alternative options. In today’s marketplace, there are many choices to fulfill your needs. No one is forcing you to hire a full-service brokerage. There are companies that offer “mere posting” options, meaning you list your property on your own without agent representation, reducing commission fees for the Seller.

There are also many agents that are willing to list your property at a significant discount. Would we personally work with them to sell our home? Probably not. But, the point is, you do have choices out there. Every homeowner should know they have the opportunity to evaluate what meets their needs and wants at the time of sale.

What Do Buyers Have To Pay In Commission?

As a buyer working with a realtor, you may be asked to sign a contract called a Buyer’s Representation Agreement (BRA) before you start looking at properties. This document outlines the amount of commission the realtor that represents you is entitled to and how it is payable when you purchase a home. Generally speaking, the buyer agent is compensated through the listing brokerage from the proceeds of the sale. So, the purchaser is not responsible for any commissions or associated fees. However, there are exceptions to this rule! As a buyer, you should review compensation with your realtor in detail before signing a buyer’s representation agreement.

Five Quick Facts About Real Estate Commissions

1. The Seller pays real estate commissions at closing.
2. Real estate commissions are negotiable.
3. Various real estate services will be included and not included in your commissions – be sure to find out the who, what and why!
4. The commission paid is shared between the agent representing The Seller and the agent representing The Buyer.
5. Be sure to understand the commissions you’ve agreed to pay and what services are included before signing your Listing Agreement.

It’s essential to know your options and to work with the brokerage or realtor that best aligns with what you’re willing to pay for services rendered without judgment. Suppose you have additional questions about commission rates, negotiating commissions or the pros and cons of hiring a full-service brokerage versus selling a property on your own. If that is the case, you know where to find us!

What’s Inside The Guide To Selling Real Estate

Selling a home can be a time-consuming and complex process. When it comes to selling real estate, you’ll likely find yourself asking questions like, “How do I go about selling my home?”, “Should I buy first or sell first?”, or “Do I need a realtor to sell my property?” And, you’re not alone! In fact, if you’re asking these questions, this is a great resource for you.

Now, if you’re wondering when is the best time of year to sell, it’s when buyers are vigorously buying. The more buyers out there buying, the better it is for you as the seller. Prudent sellers sell when the market is busy. Historically, the Toronto real estate market has been busy in the spring and fall. However, it is best for you to let your personal and economic goals dictate when you should sell. Selling property in Toronto during any calendar month can generate a winning sale. Let your requirements and lifestyle settle the timing debate – and your brokers will do the rest!

It takes hard work to sell your home. And, that’s why it’s so important to do things the right way. This starts by asking the right questions, setting expectations that carry from beginning to end, and knowing how to get the best return on your property. Our Seller’s guide will walk you through the basic steps of selling your home. Our goal is for you to become more knowledgeable and better equipped to make informed decisions about selling when the time comes. Here’s what you’ll find inside:

Fox Marin Five Core Principles

Over the years, we have refined our sales approach to focus on five key principles that deliver outstanding returns for our clients. With every home listing you can expect to see these core principles put into action.

1. Details matter. From competitive research to staging and marketing properties, we invest time and energy in positioning your property to gain the best possible results.
2. Branding makes a difference. Our personalized sales approach includes custom-designed marketing collateral, professional photography, digital and social media exposure — all based on the business fundamentals that have driven our success over the past two decades.
3. Hard work pays dividends. Whether it’s hiding wires or scrubbing your terrace before the photographer arrives, there’s no job we won’t do to present your property in the best possible light.
4. Open and honest communication is key. We’re in constant contact with you every step of the way, so you’re always in the know.
5. Our network is your network. We provide complete transaction management, with access to lawyers, mortgage brokers, home inspectors and contractors you can trust.

Download Your Guide To Selling Real Estate

Remember, the more you know, the better. Download this guide and get started on selling your home in Toronto’s fast-paced real estate market. Selling real estate just got easier.

And, when you’re ready to get into selling your home, we’ll be with you every step of the way.