I am often asked by buyers and sellers, who pays your commission and how much is it?
The answer it is, the seller pays. If you are a buyer, you do not pay any commission at all. In Ottawa, the average commission is 5%, split between the listing brokerage and what we call the “cooperating” brokerage, which brings the buyer. So 2.5% is paid to each brokerage, plus HST.
Another question I get regularly is what do you do to earn that commission?
Well, I can only tell you what I do. Every realtor is different.
If I am acting for the seller, I help them determine a fair price to list the house for sale by looking at comparable homes in the neighbourhood that have sold recently.
I do a walkthrough of their home with them and point out what I think needs to be done to show it off to its best. I may bring in trades to paint, effect small repairs like adding backsplashes, replacing tile, carpet and so on. (I’ve been known to grout tile for clients, myself, and once, when a carpet cleaner didn’t show up, I did that too.) I have a list of trades who I work with often enough that they will usually drop everything to help me out with a client. I don’t pay for that kind of thing; that’s up to the client to deal with, but I will project manage the work at no change.
I often stage the house, at my own expense, unless I have to find larger pieces of furniture; then I go across town to a supplier that leases furniture and pick out what will work. I make sure I’m there when it’s delivered and I set things up. I also act as my clients personal shopper, picking out light fixtures, new cabinet pulls, mirrors, bedding and cushions, often running all over town to get discounts or buying from Kijiji to keep their costs down.
I will often invest several hundred dollars of my own money (I think $ 600 has been my upper limit) on things like art and accessories for staging. (I pay a monthly fee to Dymon, by the way, to store those items; my house was being over-run.) Sometimes, I bring in my own art, bedding, and accessories if I think they will work best.
I gather and verify the information required to ensure the listing is accurate including lot sizes (frontage and depth; sometimes, by the way, the MPAC frontages are wrong and when I find an error, I take steps to inform MPAC), taxes, condo fees if applicable, and utilities costs.
I arrange to take photographs that show the property off as its very best.
I load all of this information onto the MLS system (we call it MLX) along with things like directions, public comments and salesperson remarks, then I put up the For Sale sign.
I will usually host an Agent Open House within the first week of the listing to get some agents through, and as many public Open Houses on weekends as is feasible for the owners. I report to my clients on an almost daily basis about prospecting activity, i.e. statistics: how many online searches have there been, how many emails with their listing have been sent out by agents, and how many people have downloaded their listing. I keep track of showing requests and answer all agent questions.
If an offer comes in, I stick handle the negotiations and the paperwork, including counter-offers. If we conclude a deal, I make sure my clients and their lawyer get the paperwork they need.
I answer questions throughout this entire period from all prospective buyers and other realtors, usually within minutes. And I often run over to see my clients when I know they are stressed out with a casserole or something to let them have a night off.
I have also been known to shovel walkways and pick up flyers for clients who are out of town. So I see my job as whatever it takes to help make the process as stress-free as possible: a mixture of advice, design, concierge services, negotiations and analysis.
That’s what I do for sellers.
If I am working with a buyer, I try to meet with them at my office so we can look at listings on the big computer screen in our client room. That way, I can see exactly what they like and what they don’t like so that I am not wasting their time by sending them listings of properties they won’t like.
Then I set up a search to have MLX send me new listings based on those parameters, which I vet before I pass them along with my comments. I make sure they have their financing in place before we start looking and refer them to a mortgage broker if they need one.
I arrange showings for the properties they want to see and I go with them, including to weekend Open Houses if a property they would like to see is having one. If they find something they like, I figure out a range of what’s fair in terms of price and advise them on strategy. I handle negotiations and the back and forth with the other agent until we can reach an agreement that is satisfactory to both sides.
I make sure the paperwork is done properly and that the buyer’s lawyer and financial institution have copies of what they need. I arrange for, and accompany the buyer to, the home inspection. I make sure that conditions are removed within the deadlines we have agreed to do so, and I make sure the other agent is kept in the loop when we run into problems. Communication is crucial.
I accompany the buyers at all subsequent visits to the property to measure and so on; I make sure that all their questions are answered, and I follow up with them after closing to make sure things went smoothly.
Oh, and I also make a point of getting a personalized house warming gift to welcome my buyers into their new home.
That’s how I earn my 2.5% commissions.
And by the way, that 2.5% is split with my brokerage. I also pay quite a lot of monthly board fees and insurance, as well as professional membership fees. I certainly feel at the end of a transaction that I’ve earned my fee. So far, every client I’ve worked with has given me a testimonial, so I guess they agree.