I recently took over a listing from another Realtor that had 9 showings over 60 days, it did not sell. Upon relisting the home and adjusting the buy side commission, 7 days later the property was sold.
CBC Marketplace recently did an expose on how some real estate agents behave in relation to lower than expected commissions. This segment generated a lot of heated engagement, it highlighted issues with the real estate profession and exposed questionable ethics. The segment did lack in objectivity, if you’d like to find out more, read this thread by John Pasalis that gets into the nuance of the situation.
https://lnkd.in/g3AHzaHm
This post’s intention is a PSA based on my own experience with buy side commissions and how they impact properties. The typical real estate commission in the GTA is made up of the listing agent’s commission and the buying agent’s commission. These used to be standard at 2.5% each for a total of 5%. As homes have increased in value and with the increased number of agents, negotiating the listing commission is straight forward and in many cases expected, although some realtors will not negotiate this. Negotiating the buy side commission is not straight forward.
I recently took over a listing that had the buy side commission lowered to 2% from the standard 2.5%. The listing sat for 60 days with only 9 showings. After bumping the buy side commission back to ‘market’, 7 days and 12 showings later the property was sold. On occasion lowering the buy side commission will have a negligible effect, inverse relationship to how desirable a property is, but for anything less than exceptional it’s like playing with fire, often negating any commission savings with a lower sales price.
Lowering buy side commissions will punish listings because of unethical people, trying to circumvent human nature is a risky endeavour. On the flipside, when I am engaged by a client as a buy side Realtor, for someone shopping on ‘price only’ I purposely seek out listings with lower buy side commissions as I know I will have a lot more leverage and will likely secure a below market deal. The long-term relationship & referrals from a solid deal for a client far outweigh any commission cheque. #realestate #cbcmarketplace #toronto
