Real Estate

Help needed - is it worth hiring a 1% comm agent to sell real property

  • Last Updated:
  • Jul 4th, 2020 9:20 pm
[OP]
Newbie
Jan 28, 2010
45 posts
10 upvotes
Toronto

Help needed - is it worth hiring a 1% comm agent to sell real property

Hi RDfers,

I want to sell a property in Brampton area for 1.25M [just to breakeven]. It was a bad decision, to begin with. we bought the property just before the RE market crash in March of 2017 at a very high price.
I want to take my equity and exit from the market.

The realtor commission cost is my biggest problem. I do not want to pay 3.5%.

Do you recommend hiring 1% comm agent to sell real property such as https://ontario.onepercentrealty.com/


Updated on July 3rd:
I want to thank everyone for their generous advice. I wish I can respond to all the posts and say thanks individually.
Last edited by akconsulting on Jul 4th, 2020 11:16 am, edited 4 times in total.
81 replies
Deal Guru
Feb 9, 2009
12360 posts
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akconsulting wrote: Hi RDfers,

I want to sell a property in Brampton area for 1.25M [just to breakeven]. It was a bad decision, to begin with. we bought the property just before the RE market crash in March of 2017 at a very high price.
I want to take my equity and exit from the market.

The realtor commission cost is my biggest problem. I do not want to pay 3.5%.

Do you recommend hiring 1% comm agent to sell real property such as https://ontario.onepercentrealty.com/

Any advice will be much appreciated.
Buyer agent will take 2.5% -- LOL at them thinking buyer agent will take $3500

HAHAHAHAHAA
Deal Addict
Jul 3, 2007
4033 posts
4515 upvotes
Toronto
akconsulting wrote: Hi RDfers,

I want to sell a property in Brampton area for 1.25M [just to breakeven]. It was a bad decision, to begin with. we bought the property just before the RE market crash in March of 2017 at a very high price.
I want to take my equity and exit from the market.

The realtor commission cost is my biggest problem. I do not want to pay 3.5%.

Do you recommend hiring 1% comm agent to sell real property such as https://ontario.onepercentrealty.com/

Any advice will be much appreciated.
get it listed on MLS for as cheap as possible.... but I think 1% total is not happening, you will have to give up at least 1% to the buying agent....

once its on MLS people will see it and ask about it ....if the price is right they wont care what their agent thinks about the commission

before trying MLS, you can also put up a sign on your lawn for a private sale, no agents.....use kijiji etc for ads....but this is a much lower
exposure way to sell your house..... you will have to get lucky.....sometimes people in your area will have friends and family looking
to live near them.....so when they drive by they will see your home for sale and tell them about it....
Deal Fanatic
Mar 27, 2004
7347 posts
5303 upvotes
Toronto
it's a hot market.

so let's test that theory that many have regarding the coop. list it with 3500$ coop and see if your sale price is impacted by the low coop you pay.
Full-time Realtor
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Jun 1, 2019
251 posts
331 upvotes
I work for company OP mentioned, 23 deals this year so far (in a slow year, where I spent the first 3 weeks on vacation, and March-early May was Covid slow).

My honest experience re: buyer agents and low co-op commission: 5 years ago it was a struggle... today, not so. Reason: buyers tell their agents the houses they want to buy, and don't care how much the agent is making. Agents have little to no power over their buyers, because almost every buyer uses the internet and is very informed. There are some agents that grumble, but that's about it. If a house is desirable and priced properly, it will sell regardless of the brokerage. I listed one last week that had 5 offers and sold over asking.

So my advice to OP is: it doesn't matter which brokerage you use (the buyer doesn't care), so you might as well save $$$. Make sure that the agent you pick is super-competent and professional.
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Niagara / Hamilton-Burlington
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Why not try the cheapest option first? If it doesn't work then find an agent. Agents will tell you it can't be done but they are looking after their livelihood. If a buyer's like me I'm not taking the properties my agent's giving me. I'm looking for the properties myself and seeing what's out there and telling my agent what I want...so as much as agents try to discourage it, they can't stop their clients from looking.
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Feb 2, 2014
10213 posts
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Toronto
akconsulting wrote: Hi RDfers,

I want to sell a property in Brampton area for 1.25M [just to breakeven]. It was a bad decision, to begin with. we bought the property just before the RE market crash in March of 2017 at a very high price.
I want to take my equity and exit from the market.

The realtor commission cost is my biggest problem. I do not want to pay 3.5%.

Do you recommend hiring 1% comm agent to sell real property such as https://ontario.onepercentrealty.com/

Any advice will be much appreciated.
The 1% is just the listing fee OP. You have to add the buyer's agent commission which is 2.5%, so you're paying 3.5% in total.
Kevin Somnauth, CFA
Principal Broker - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
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I go on bungol to look at listings all the time -- i rarely ever see a property listed with buyers commission under 2.5% (some list at 2%)...buyer agents know they can ask if they have the right client as the commission comes right out of your pocket...are you not going to accept a buyers offer cause of an agents commission?

Buyers also split commission with their agent so the buyers themselves ask the agent to ask for the highest commission -- this is brampton after all everyone wants a piece of the pie.
Last edited by Sanyo on Jul 2nd, 2020 12:00 pm, edited 2 times in total.
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Jun 1, 2019
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CdnRealEstateGuy wrote: The 1% is just the listing fee OP. You have to add the buyer's agent commission which is 2.5%, so you're paying 3.5% in total.
This is exactly wrong - you have no idea what you're talking about. OP even provided a url that, had you clicked and spent 30 seconds researching, would have prevented your misinformed post.
Last edited by Tailwind72 on Jul 2nd, 2020 12:02 pm, edited 1 time in total.
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Sanyo wrote: I go on bungol to look at listings all the time -- i rarely ever see a property listed with buyers commission under 2.5%...buyer agents know they can ask if they have the right client as the commission comes right out of your pocket...are you not going to accept a buyers offer cause of a 2.5% commission?
Are you saying the buyer will back out of the deal if their agent isn't offered 2.5% commission? Why should the buyer care? And even more, shouldn't a buyer be very very upset with their agent if the agent kills a good offer by asking for 2.5%?
Full Service Realtor
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Tailwind72 wrote: Are you saying the buyer will back out of the deal if their agent isn't offered 2.5% commission? Why should the buyer care? And even more, shouldn't a buyer be very very upset with their agent if the agent kills a good offer by asking for 2.5%?
Because many buyer agents split their commission these days with their clients...at least in gta, not sure in niagara....that pays much of the land transfer tax of the property, if i looked for a property i would look at 2.5% agent and look for an agent to split their commission.
Member
Jun 1, 2019
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Sanyo wrote: Because many buyer agents split their commission these days with their clients...at least in gta, not sure in niagara....that pays much of the land transfer tax of the property, if i looked for a property i would look at 2.5% agent and look for an agent to split their commission.
Sure, this happens sometimes (I do the commission split myself, with buyers). But in many-to-most cases this is NOT the norm, and the buying agent pockets the full buying agent commission. Even moreso, if the listing agent double-ends.
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Tailwind72 wrote: Sure, this happens sometimes (I do the commission split myself, with buyers). But in many-to-most cases this is NOT the norm, and the buying agent pockets the full buying agent commission. Even moreso, if the listing agent double-ends.
Talking to agents here it happens alot -- especially asian clients they are all about their rebates.
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Jun 1, 2019
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Sanyo wrote: Talking to agents here it happens alot -- especially asian clients they are all about their rebates.
Sure, this can be the case, but even in these scenarios, half of a buyer's agent commission (i.e. ~1%) is not a huge difference, from the buyer's perspective, on the total buying price.

Regardless, I'm not seeing the buying agent commission a barrier to sales, in 2020. Like I said earlier, I've done ~23 deals so far this year, offering much less than 2.5% buyers agent commission.

Let's do some math for OP.
Assume OP has valuated his/her house properly, at $1.25M, and this is the selling price.
If OP goes the 3.5% route, OP pays 3.5% + HST in commissions: $49,437.50 in commissions.
If OP goes with 1% Realty (1% + $950 + HST), OP pays $15,198.50 in commissions.

The difference, $34,239 is massive. For most people this is over a year of post-tax savings, after life expenses.
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Tailwind72 wrote: This is exactly wrong - you have no idea what you're talking about. OP even provided a url that, had you clicked and spent 30 seconds researching, would have prevented your misinformed post.
Face With Tears Of JoyFace With Tears Of JoyFace With Tears Of Joy

Any realtor who advises their clients to pay the buyer's agent .5% is a horrendous agent.

The pool of buyers in the market will be drastically reduced and it will show when you get an offer.
Kevin Somnauth, CFA
Principal Broker - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
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mrct1944 wrote: This BUNGOL listing by One Percent Realty shows 0.5% commission to Buyer's Agent. However, the "Time On Market" is 15 days, which, in the current Whitby market, is a lifetime. Most homes are selling in less than a week.

https://www.bungol.ca/map/43.897230&-78 ... 69-4143829
It's funny how you can see this, but a licensed real estate agent on this thread can't.

I live and work in Durham...things are moving fast and getting multiples. But hey, at least their saving 2% right?
Kevin Somnauth, CFA
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Tailwind72 wrote: Are you saying the buyer will back out of the deal if their agent isn't offered 2.5% commission? Why should the buyer care? And even more, shouldn't a buyer be very very upset with their agent if the agent kills a good offer by asking for 2.5%?
How are you a licensed real estate agent? I'm not believing this at all.

Back out of the deal? To "back out of a deal" means the buyer and seller came to an agreement. Paying the buyer's agent .5% will likely not result in a good offer period (as other non real estate professionals have posted).
Kevin Somnauth, CFA
Principal Broker - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
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mrct1944 wrote: This BUNGOL listing by One Percent Realty shows 0.5% commission to Buyer's Agent. However, the "Time On Market" is 15 days, which, in the current Whitby market, is a lifetime. Most homes are selling in less than a week.

https://www.bungol.ca/map/43.897230&-78 ... 69-4143829
CdnRealEstateGuy wrote: Face With Tears Of JoyFace With Tears Of JoyFace With Tears Of Joy

Any realtor who advises their clients to pay the buyer's agent .5% is a horrendous agent.

The pool of buyers in the market will be drastically reduced and it will show when you get an offer.
CdnRealEstateGuy wrote: It's funny how you can see this, but a licensed real estate agent on this thread can't.

I live and work in Durham...things are moving fast and getting multiples. But hey, at least their saving 2% right?
This particular property has been on the market since third week of May, relisted mid June.
The sunset photo didn’t help with the sale Winking Face
In the current environment the sellers are better off offering co-op commissions of between 2-2.5%.
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senasena wrote: This particular property has been on the market since third week of May, relisted mid June.
The sunset photo didn’t help with the sale Winking Face
In the current environment the sellers are better off offering co-op commissions of between 2-2.5%.
Again, not sure why another real estate rep. is saying otherwise.

Paying the buyer's agent .5% will hurt you in the pockets. If you want to cheap out, pay for a mere listing to save on the listing fee (essentially cut out the listing agent). Do NOT cut out the buyer's agent.

When I sold my condo, I listed it myself, but paid the buyer's agent 2.5%.
Kevin Somnauth, CFA
Principal Broker - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative

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