A common question from a buyer in Toronto is, “how much does it cost to buy a home with a real estate Agent?” It may surprise people that it doesn’t cost the buyer anything. Buying a house or condo in Toronto isn’t cheap. It’s a substantial investment for any buyer. Knowing there are no additional commission costs can alleviate some of the stress for those buying. Choosing the right real estate agent will mean getting excellent advice and service without paying up-front. Let us explain why.
Risk-Free
There is no “risk” when paying a realtor as a buyer. There can be a risk in choosing the wrong realtor, but that is for another blog – so it’s essential to choose a great Realtor. Since a Realtor only gets paid when a deal is completed and closed, there is no upfront cost to work with a Realtor. We will get to who pays (below) but rest assured it isn’t the buyer. If you don’t succeed in buying or no longer connect with the agent, there is an opportunity to walk away. Remember that it is worthwhile and essential to sign a Buyer Representation Agreement when working with a Realtor. It can be adjusted to specific neighbourhoods, towns, price points, condo versus house and timeframe. Be sure to ask questions so that you understand the agreement in detail.
➤ Every good investment needs a well-planned strategy. Start preparing with the following:
- Are Condos A Good Investment?
- The Most Undervalued Condos In Toronto
- Condo vs House Investment
- Why Parents Should Invest In Toronto Condos For Their Children
- Millennial Home Buying Trends
Seller Pays the Commission
This is what you have been waiting for. If you, the buyer, are not responsible for the real estate agent’s commission, who is? It’s the seller. In the agreement of purchase and sale, the commission is detailed, and how the seller will pay it directly to the buyer’s brokerage (aka co-operating brokerages) upon closing. If in the case that the seller does not offer a commission (rare, but it can happen), then it is your realtor’s responsibility to build it into the price so that you don’t have to pay out of pocket. Very few realtors know to 1) do this; 2) how to construct the deal when a seller isn’t offering a commission – again, choose your real estate wisely!
The Realtor Gets Paid Once The Property Closes
Once the real estate agent has successfully negotiated on your behalf the purchase of your dream home, and they see through the sale process to the point that the keys are in your hand, it’s only then that your real estate agent gets paid. There is no up-front commission payment in most deals. It’s a great deal considering that, if you have chosen wisely, the agent does a great deal of due diligence, negotiation and professional communication. Hence, the entire home process is a wonderful experience.
