Who Pays the Real Estate Agent?

When selling a home, a good Realtor® can help you attract qualified buyers and maximize the full value of your property. When buying, their expertise and ability to negotiate are indispensable if you want the best value possible for the market. One question that always pops up eventually is, “Who pays the Realtor®?” In this post, we’ll dive in deeper.

The many advantages of working with a caring and skilled real estate agent are undeniable. It doesn’t matter whether you are buying or selling a home, nothing compares to having expert advice on demand and an entire team to support you throughout what might otherwise be a stressful transition.

Planning to sell your house in Peterborough or Kawartha Lakes? Knowing its value in today’s market is an excellent place to start. Book your free home evaluation today.

How Do Realtors Get Paid in Ontario?

Who pays the Realtor® fees, the buyer or seller? In most cases, the seller pays for all commissions, which are then split between the listing and buying brokerages. This may seem unfortunate if you’re the one putting your home on the market, but it isn’t all bad news.

First of all, real estate commissions are negotiable to a point. Most services also have multiple packages to choose from depending on the level of support you need. A certain percentage of your selling price going to commissions is well worth it if you want to experience a high value sale with little time or effort on your part.

Secondly, your Realtor® only receives commissions when and if your house sells – unless otherwise stipulated in your Listing Agreement. If the contract expires without a buyer, you usually don’t need to pay anything at all.

Looking for more tips to sell your home and get stellar results? Check out the related reads below:

Real Estate Is Not One Size Fits All

Many full-service teams, like ours, offer the option to do it all. We can arrange for the cleaning, repairs, staging, photography, marketing, and more. Your job is to hand us the keys and we take it from there. Alternatively, if you have a keypad lock or install a lockbox, you don’t even have to do that. Just let us know when it’s a good time to come in and work our magic, and we’ll be there.

If you want to be more involved with the selling process, you can choose from a different service package, likely at a lower commission. However, keep in mind that the end results are your highest priority.

Choosing a concierge service level can often result in more profits from your sale due to the number of connections and potential outreach of the marketing. When weighing your options, be sure that you don’t accidentally agree to work harder for less reward when you could end up with more money from less effort!

What is the value of a real estate agent and how do you find the right expert? Find out in the posts below:

Exceptions to the Rule

The answer to “who pays the real estate agent commission” is almost always the seller. However, real estate is complex, and there are a variety of different situations that could affect the outcome. As with nearly every rule in life, there are some exceptions.

FSBO Transactions

What happens if you don’t use an agent at all and decide to list your house For Sale By Owner (FSBO)? This situation can muddy the waters somewhat.

The buyer is almost certainly working with a Realtor® even if you aren’t. When the transaction finalizes, they will need to be paid. This arrangement can work in one of two ways:

The seller pays

Most often, the seller still has to pay commission to the buyer’s agent, though the percentage is likely lower since there’s no listing brokerage to split it with. Many sellers are tempted by this option, but be sure you know what you’re getting into. FSBO sales can be riskier and more challenging than they appear at first glance!

The buyer pays

A skilled FSBO negotiator might be able to stipulate that the buyer pays their agent directly. In this case, the terms will be clearly laid out in the Agreement of Purchase and Sale.

Searching for your next home in Peterborough or Kawartha Lakes? Browsing our latest listings is a logical first step!

Clauses in the Buyer Representation Agreement

The Buyer Representation Agreement is the contract between a client seeking to purchase a home and their real estate brokerage. Most of the time, the terms will state that the brokerage will first seek compensation from the seller’s brokerage.

Real estate commissions are part of the closing process, and most of the time, it all goes off without a hitch. Nevertheless, you should always check what happens if the seller’s brokerage does not pay, or pays out less than a certain percentage.

Sometimes, it will fall on the buyer to make up the difference and pay their agent directly. Knowing such a clause exists is beneficial. It could give you extra bargaining power to negotiate a price concession from the seller to cover the cost.

Whatever side of the transaction you are on, it’s important to read and understand each clause before you sign. Once signed, the contract becomes legally binding. The complexity of the paperwork alone is a good reason to choose to work with a real estate agent, whether buying or selling!

Our Peterborough real estate agents are committed to helping you get results. Reach out to team@jeffandkatie.ca or call 705-243-9797 to start the conversation today.