In recent years, real estate commissions have become a topic of frequent discussion with many consumers of the opinion that commissions charged are too high or perhaps it’s a matter that the perceived value they received from their REALTOR® was not commensurate with the commission or fee charged.
Contrary to what consumers may have been lead to believe, real estate commissions are and always have been negotiable. The only real restriction that has been placed on commissions is not the amount that can or cannot be charged but rather the format of how commissions are calculated but that is about to change.
The real estate profession is governed by Provincial law, specifically the Real Estate and Business Brokers Act (REBBA 2002) Previously as per REBBA 2002; a real estate brokerage could charge either a flat fee to list and sell a property or a percentage of the sale price, but not a combination of the two. Recent amendments to REBBA 2002 have removed this restriction, allowing brokerages to have the option of developing fee or commission structures that may include a combination of a flat fee and a percentage of the sale price.
This now gives brokerages the additional flexibility in how they structure pricing to suit their business needs and desires of their specific clients. Personally I view this as a win win situation for REALTORS® as well as consumers. Every property and every selling circumstance is different and this change as to how real estate fees/commissions are derived provides greater freedom to address each situation in a manner that will garner the best results for everyone involved.
Ultimately, market forces will determine which fee structures are attractive to consumers. It is more important than ever for consumers to understand what services their REALTOR® will provide and how or who will pay for those services.
If you are contemplating the sale of your property and are not certain as to how the new rules affect you, please feel free to contact me and without obligation I would be happy to discuss and clarify the issue for you.