Real Estate

Why are real estate agents still charging 2.5%?!

  • Last Updated:
  • Jan 22nd, 2020 4:37 pm
[OP]
Newbie
Jan 8, 2020
0 posts
3 upvotes

Why are real estate agents still charging 2.5%?!

With the crazy rise in real estate prices over the last 15+ years, how are people still okay with agents/brokers taking the same commission they used to? It seems unfair that they get to do a deal for a house that might've risen from $500k to $1 million in that time period and take the same percentage. That's $25,000 up from $12,500...and it's not like the requirements for their work have gone up dramatically. Instead of newspaper ads they do simple websites which use MLS data. They still take photos (often times they take their own since digital photos are so easy).

Has anyone used a discount brokerage or a commission free service? How'd that experience go?
52 replies
Deal Addict
Jan 1, 2013
1282 posts
644 upvotes
Durham
The buying agent still needs to get paid also. Agents hire professional photographers and many include home staging now. A lot more is covered when selling then before. If not, you need a new agent.
Deal Addict
Apr 11, 2009
2805 posts
362 upvotes
1) It's a cartel
2) Because they can
Deal Addict
User avatar
Dec 24, 2007
1062 posts
1069 upvotes
BC
Like tips, anything that is calculated on a base of something that has no relation to the actual service just becomes the "norm" unless people finally wake up and revolt.

Why do we tip based on the price of a meal - did the server do any different to give me the meal whether I paid $50 for a meal vs. $25 for meal?

It's ridiculous but we keep doing it as everyone "expects" it.
Deal Addict
User avatar
Mar 10, 2018
2993 posts
271 upvotes
easyriderstoronto wrote:
Jan 13th, 2020 2:59 pm
With the crazy rise in real estate prices over the last 15+ years, how are people still okay with agents/brokers taking the same commission they used to? It seems unfair that they get to do a deal for a house that might've risen from $500k to $1 million in that time period and take the same percentage. That's $25,000 up from $12,500...and it's not like the requirements for their work have gone up dramatically. Instead of newspaper ads they do simple websites which use MLS data. They still take photos (often times they take their own since digital photos are so easy).

Has anyone used a discount brokerage or a commission free service? How'd that experience go?
Because its 2020 and they can by law. You can go without agent or other avenues.
I dont care about Ethics, morals, rules or laws. I will apologies only when I get caught.
I try not to apologies but sometimes do it. not because its right thing but it benefits me.
Sr. Member
User avatar
Nov 1, 2001
571 posts
139 upvotes
Toronto
Not only that there was the argument servers weren't paid minimum wage because tips were expected. Then when they were paid minimum wage it became oh it's based on service.
Deal Addict
User avatar
Mar 9, 2012
2852 posts
1571 upvotes
Kitchener
easyriderstoronto wrote:
Jan 13th, 2020 2:59 pm
With the crazy rise in real estate prices over the last 15+ years, how are people still okay with agents/brokers taking the same commission they used to? It seems unfair that they get to do a deal for a house that might've risen from $500k to $1 million in that time period and take the same percentage. That's $25,000 up from $12,500...and it's not like the requirements for their work have gone up dramatically. Instead of newspaper ads they do simple websites which use MLS data. They still take photos (often times they take their own since digital photos are so easy).

Has anyone used a discount brokerage or a commission free service? How'd that experience go?
Same reason why they charge the same rate when the market crashes and the sales drop through the roof.
How can we fly like eagles, when we're governed by Turkeys?
Jr. Member
May 28, 2012
181 posts
97 upvotes
ONT
Kkhan15 wrote:
Jan 13th, 2020 4:27 pm
The buying agent still needs to get paid also. Agents hire professional photographers and many include home staging now. A lot more is covered when selling then before. If not, you need a new agent.
And if the house did not sell after these expenses the agent gets 0%
Member
Sep 16, 2017
228 posts
109 upvotes
why are people in a rush to the lowest cost? then complain about quality? people need to earn $$ for services provided. They have costs incurred including time. 2.5% is reasonable. If it is the same as 20 years ago they are likely asking why hasn't the amount increased? Well, because inflation. Therefore, the 2.5% is justified.
Member
Dec 21, 2010
227 posts
63 upvotes
Toronto
Pay what you like .. live with whatever transpires
Sr. Member
Jul 22, 2015
521 posts
137 upvotes
Ontario
Professional photography, professional video, professional staging, and now instead of newspaper ads, there are social media ads which are not cheap. There's a lot of costs that go into selling a home which you don't see. The good thing is that there's a lot of agents to choose from. If you want to go with a discount brokerage, just be prepared to not get all the bells and whistles.
Jr. Member
Nov 14, 2016
105 posts
59 upvotes
Toronto
Coz the commissions are not guaranteed. If there is no sale, realtors make $0 while still paying for OREA/CREA/TREB/RECO/Brokerage fees etc. I have seen a lot of listings paying 2.25% and outside of GTA, there are a lot of 2% as well.
Newbie
Apr 16, 2013
18 posts
7 upvotes
Toronto
When we sold our condo we used a One percent agent and paid a flat rate ($7950 all in for buying and selling agent, fraction of what was quoted elsewhere). We had no issues with showings and still got the highest sold price to-date for our unit size.
Deal Fanatic
User avatar
Sep 8, 2007
7329 posts
6851 upvotes
Way Out of GTA
Hyphy wrote:
Jan 13th, 2020 4:32 pm
1) It's a cartel
2) Because they can
I ask the same about waterheater rentals (which are forced into contracts) with new builders in Ontario.

Same answers. Sadly...
Deal Addict
Mar 27, 2004
3463 posts
917 upvotes
Toronto
toradian wrote:
Jan 14th, 2020 10:55 am
Coz the commissions are not guaranteed. If there is no sale, realtors make $0 while still paying for OREA/CREA/TREB/RECO/Brokerage fees etc. I have seen a lot of listings paying 2.25% and outside of GTA, there are a lot of 2% as well.
Exactly this. I've worked with many buyers that end up taking a long time to buy or not buy anything at all. no one is paying me when the buyer doesn't buy anything. there is opportunity costs involved. this is why the coop is still that amount.
Full-time Realtor
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