Ever wondered how agents get paid when they help their clients buy, sell or rent a home? They get a commission – a percentage of the sale or lease price that’s specified in the representation agreement you sign when you agree to work with them.
Buyers and renters don’t pay a penny to their agent. In most situations, 100% of the commission comes from the sellers (or the landlord, in the case of rentals), and is split between the buyer agent and seller agent (or leasing agent and listing agent).
Read more: Who pays the fees in a home sale?
What does the commission pay for?
For the seller’s agent (or the landlord), it covers a lot. Including the deep market research that goes into a pricing strategy. Marketing the listing (photos, videos, websites, flyers, social media, and more.) It pays for the time they spend talking to buyer agents, their negotiating skills in getting you the best price, dealing with paperwork, recommending lawyers, stagers, and other pros, and paying their brokerage fee (the monthly fee that covers the support they get from their company, and the right to use the company’s brand).
Plus, when you work with a Property.ca agent, your listing will be featured on condos.ca or property.ca – getting it in front of hundreds of thousands of potential buyers.
For buyer (or leasing) agents, their commission pays them for the time they spend taking buyers on showings – that can mean dozens of visits. It covers staying on top of market trends and advising buyers on appropriate offers and strategies. Educating first-time buyers. Submitting offers – often multiple times – as buyers don’t often win on their first, second, or even third bid. Introducing buyers to mortgage brokers, lawyers, and movers. And, of course, doing all the paperwork that comes with buying a property.
An agent’s commission is their only income
They don’t get a salary or an hourly rate. All their costs – from marketing to staff – come out of their commission.
How much is the commission?
Different agents and brokerages have different commission structures, so it’s up to you to find one you’re comfortable with. But one thing to remember: as in most things in life, you tend to get what you pay for. A discount brokerage will get you bare-bones services, while a company that offers a “full-service” model (like property.ca) will cover a lot more bases and make the process easier and less stressful.
Looking for a great agent who will earn every penny? Here’s how to find one that will work hard for you.