Past few years, the real estate business has flourished and expanded in Canada. Even during 2020, when the pandemic affected all businesses - still real estate grew consistently. It leads people to believe that a real estate agent earns tons of money through commissions. However, the reality is not as simple as it seems. Here are five things you need to know about the real estate commission.
Commission Paid to a REALTOR®
Various factors influence the commission rate; these include the place/city of transaction and the magnitude of brokerage. Secondly, the commission paid by the seller divides further among the seller's agent and buyer’s agent. A distribution where the commission is paid first to the listing agent - who then gives a part of it to the buyer's agent is called cooperating commission. Both agents then hand over a fraction of their share to their brokerage. Mostly, the brokerage's share is 30% or more of the agent's commission. In Ontario, the commission is divided 50% among the listing and the buyer agent.
Expenses of a Real Estate Agent
The reality is the opposite of the general perception that REALTORS® earn ample amounts through minimum expenditures. Becoming a successful real estate agent requires time and money investment. Real estate agents pay fees for license and registration before they can become an agent officially. Other expenditures include training fees, premium insurance, home staging and marketing costs. Canadian Real Estate Association (CREA) offers annual membership for $310; membership might cost you an additional fee depending on the province. To retain membership of the municipal real estate board Ontario - REALTOR® in Ontario pay $115 to the Ontario Real Estate Association.
Realtor’s Incomes Fluctuate
Real Estate is a career that rewards when it is booming but has no guarantees. Only a few REALTOR® pull off a large number of sales per year - some real estate agents hardly make one sale per year. REALTORS® have a commission-based salary that depends on the house sales with no sales - real estate agents earn no money. The salary of a real estate agent fluctuates based on the province/city in which they operate. In Ontario, commission rates are usually 5% of the selling price. Commission rates depend on the size of the sale realtor conducted. The more houses REALTORS® helps to sell or buy, the bigger the earning will be.
Experience of a REALTOR® Greatly Benefits
A real estate agent brings experience and expertise to the table. The real estate industry has also adapted technology like other industries; REALTOR® pays to run ads and campaigns on Facebook and Google. REALTORS® can broaden the exposure for your property with their skills and experience. Real estate agents can negotiate better deals, guide you, and enhance chances of sale for you. The expertise of REALTORS® makes a complex transaction full of legal and financial risks - smooth for you.
REALTORS® Create Value
You realize the value a REALTOR® brings to your sale deal when you try to sell your house yourself. The process is full of financial and legal complexities - only an expert can complete it fittingly. The obstacles in smooth sales range from fewer potential buyers, proper negotiation, and little to no free time to show home to buyers. Having a REALTOR® keeps you ahead of the game; the REALTOR® deals with price issues and arranges a good sale for you.
Real estate agents devise their business strategies professionally to build their brand. The benefit of a brand name is its extensive reach to people. The key to success and higher earnings for real estate agents lies in building a consistent online presence and improving their reputation.
To achieve the best results, choose THE BEST REALTOR® IN KITCHENER Mike Bolger for your next sale/purchase. We offer sale, lease, rental and purchase services for real property.
CALL MIKE NOW: (519) 616-2656