Real Estate

Offering lower commission to buyer’s agent in hot market?

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  • Aug 7th, 2021 6:27 am
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Jun 1, 2019
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Offering lower commission to buyer’s agent in hot market?

I know the “standard” commission is 2.5% each agent when selling a house these days. Im wondering if anyone has listed a house with an agent and only offered 1-1.5% to the co-op buying agent due to the current market. I find that a lot of clients are looking up houses on realtor.ca and sending them to their agents to make an appointment anyways. Will it really harm you as a seller if you reduce the commission to the co-op agent to 1%? Especially if you’re selling a home over 1.5M?
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Tush171717 wrote: I know the “standard” commission is 2.5% each agent when selling a house these days. Im wondering if anyone has listed a house with an agent and only offered 1-1.5% to the co-op buying agent due to the current market. I find that a lot of clients are looking up houses on realtor.ca and sending them to their agents to make an appointment anyways. Will it really harm you as a seller if you reduce the commission to the co-op agent to 1%? Especially if you’re selling a home over 1.5M?
Oh Boy! You are in for a world of realo....i mean posters telling you that 'experts' won't show houses to their clients unless they are getting their 2.5% cut. In reality if my realtor refused to show me a home I wanted to see I would get a new realtor.
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Tush171717 wrote: I know the “standard” commission is 2.5% each agent when selling a house these days. Im wondering if anyone has listed a house with an agent and only offered 1-1.5% to the co-op buying agent due to the current market. I find that a lot of clients are looking up houses on realtor.ca and sending them to their agents to make an appointment anyways. Will it really harm you as a seller if you reduce the commission to the co-op agent to 1%? Especially if you’re selling a home over 1.5M?
Some (all?) buying agent BRAs with their clients have a clause about their commission. So if it says they as the buying agent will be entitled to 2.5%, and the buyer really wants your home that only pays 1.5%, then the buying agent can force their client to pay them the extra 1% owed out of their pocket. Since this can lead to an awkward situation between client and agent, some agents may try to steer their clients away from considering your home.

On an old condo I sold I had the commission to buying agent as 2.25%. As part of the negotiations, the agent/buyer requested that to be bumped up to 2.5% which I ended up doing to close the sale. I wonder if the agent explained to their client that was 0.25% they could have taken off the price instead?

Some clients rely on their agents to find them properties to see, and to give them advice to put an offer or not. So there certainly may be some impact when you lower the commission too much. Though how much is anyone's guess until you try and see what happens.
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Mar 27, 2004
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Tush171717 wrote: I know the “standard” commission is 2.5% each agent when selling a house these days. Im wondering if anyone has listed a house with an agent and only offered 1-1.5% to the co-op buying agent due to the current market. I find that a lot of clients are looking up houses on realtor.ca and sending them to their agents to make an appointment anyways. Will it really harm you as a seller if you reduce the commission to the co-op agent to 1%? Especially if you’re selling a home over 1.5M?
try it and see what happens
no one is stopping you
I've seen coop commissions below 2% before.
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Oct 26, 2020
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Tush171717 wrote: I know the “standard” commission is 2.5% each agent when selling a house these days. Im wondering if anyone has listed a house with an agent and only offered 1-1.5% to the co-op buying agent due to the current market. I find that a lot of clients are looking up houses on realtor.ca and sending them to their agents to make an appointment anyways. Will it really harm you as a seller if you reduce the commission to the co-op agent to 1%? Especially if you’re selling a home over 1.5M?
I offered 2% when I sold my property this past January. Worked out well, sold over asking with 8 offers. I am surprised by how scared sellers are to lower the co-op commission. And I agree, almost all buyers look up the house online themselves.
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Jul 3, 2011
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Tush171717 wrote: I find that a lot of clients are looking up houses on realtor.ca and sending them to their agents to make an appointment anyways. Will it really harm you as a seller if you reduce the commission to the co-op agent to 1%? Especially if you’re selling a home over 1.5M?
If you think the most innocuous and least essential part of the job - finding the house - is worth the lion's share of the commission (1.5% or 60%) of your 2.5%, then might as well offer $50 for the rest of the work.

Seriously. hire a fsbo brokerage, offer .01c, to 1%, you'll get it done faster via that route than what you're proposing.
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Jamiye wrote: I offered 2% when I sold my property this past January. Worked out well, sold over asking with 8 offers. I am surprised by how scared sellers are to lower the co-op commission. And I agree, almost all buyers look up the house online themselves.
The low inventory is helping seller. as long as you are pricing it right and get multiple offers, I don't think it will be too much impact from 2.5->2.0%. Agents want the $ and speed for turnover.
profit on 6/23/2021 = 117.61% since 11/10/2020 to be exact😎
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Try it and see what happens. Literally no one is stopping you.
If you think your way works, try it,let us know.
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kr0zet wrote: Oh Boy! You are in for a world of realo....i mean posters telling you that 'experts' won't show houses to their clients unless they are getting their 2.5% cut. In reality if my realtor refused to show me a home I wanted to see I would get a new realtor.
Most people don't realize their realtors do this. I didn't until after the fact when I called a townhouse for sale by owner and it was indeed still available
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Oct 26, 2020
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oasis100 wrote: Try it and see what happens. Literally no one is stopping you.
If you think your way works, try it,let us know.
ahh the scare tactic. Didn't take a long to show up here.
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Oct 26, 2020
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ranjeet2000 wrote: Most people don't realize their realtors do this. I didn't until after the fact when I called a townhouse for sale by owner and it was indeed still available
Why did you have to call? You can see right there on realtor.ca/housesigma if it's available or not.
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Jamiye wrote: Why did you have to call? You can see right there on realtor.ca/housesigma if it's available or not.
There's sometimes a lag from what's online vs when an offer accepted. The agent said no one was answering the calls so it must not be available.
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Jamiye wrote: ahh the scare tactic. Didn't take a long to show up here.
Its not a scare tactic
I already said above I've seen homes listed with below 2% coop.
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Jamiye wrote: ahh the scare tactic. Didn't take a long to show up here.
How so?
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Tush171717 wrote: I know the “standard” commission is 2.5% each agent when selling a house these days. Im wondering if anyone has listed a house with an agent and only offered 1-1.5% to the co-op buying agent due to the current market. I find that a lot of clients are looking up houses on realtor.ca and sending them to their agents to make an appointment anyways. Will it really harm you as a seller if you reduce the commission to the co-op agent to 1%? Especially if you’re selling a home over 1.5M?
You could try it if you want. I think everyone assumes that people all look themselves when they are buying houses and don't rely on a realtor. Speaking for myself I look for things on my own and have a good understanding of the market. Multiple people from my social circle bought and I was surprised many of them had no clue about house sigma and they completely relied on their realtor. These are extremely bright people, some literally are too busy to even go look online. Some of them looked around with agents for months and months before buying so I feel their agents earned the money. I guess when you go look at property will you want your agent to get offered less commission despite them working hard to get you a home?

It could harm you if an agent who had a higher offer just did not come to show them your house. Personally I would want the most exposure from the most people and ensure I get the best offer. In the grand scheme of things years down the road I am not going to wonder about that commission money. I get people don't think RE deserve commission I dont even like most realtors myself to be honest, and there is far too many of them but at the end of the day I absolutely believe there are some tremendous ones out there who literally go for months and months sometimes even a year or more showing clients homes and I do feel those ones earned their commission.
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atom2020 wrote: I guess when you go look at property will you want your agent to get offered less commission despite them working hard to get you a home?
As I mentioned above, typically the BRA will specify the commission % the buying agent is entitled to for any home sale, regardless what it offers. So if the seller of desired property is not paying out the full commission, the buying agent can get the difference from their buyer client to make it up to their full 2.5% (or whatever they agreed to).

I imagine buyers can look to amend this to something like "buying agent commission will be limited to whatever the property is offering", but buyers need to understand and do this in advance. Some agents may or may not agree to it.
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Mar 30, 2017
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I dont get RE in ON.
hellish one-sided tenancy laws make rental a big nono
crazy 2.5%/side commission, 5% total? wtf!
here in BC the 2.5% total commission is already questionably high.
Now the market literally sell itself with decades low inventory. if the home is livable, it will sell itself.
profit on 6/23/2021 = 117.61% since 11/10/2020 to be exact😎
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seatiger wrote: I dont get RE in ON.
hellish one-sided tenancy laws make rental a big nono
crazy 2.5%/side commission, 5% total? wtf!
here in BC the 2.5% total commission is already questionably high.
Now the market literally sell itself with decades low inventory. if the home is livable, it will sell itself.
Commissions are not 5% now. Coop side may still be 2.5%, but the listing side has gone done. Many realtors list for 1%.

Homes sell themselves yes, but realtors , at least the good ones, can bring in more money than if a seller did it on their own.
Take a look at this.
33 Bay St. 2802 and 33 Bay St. 2502.
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Realtors are not even necessary in 2021. Low inventory, massive inflation, everyone’s parking their money in real estate / stocks. All you need is to maximize exposure so if your savvy enough to put some online advertisements up on various platforms, renos, staging, etc..

Your only drawback is the shady realtors who steer their clients elsewhere , but, you will have many drawn to you just based on the Renos and staging you put in. After all, a lot of clients look at houses online themselves before coming in. Overall id say you’ll easily come out on top it just depends if your are a bit savvy and are willing to spend a bit of money on staging / Reno’s as that’s what a lot of realtors would suggest you do anyway.

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