As housing prices go up, so do realtor commissions. Since these commissions add to the price of your house, this makes it tougher for you to sell. In a market where house prices are already high, this adds an extra challenge to selling your home. Commissions may be high, but there are some ways that you can save on them.
Why So High?
First of all, there is a common misconception in the real estate world that realtors take too much of a bite. As all home sellers know, you are expected to pay the commission and it’s not cheap. The truth is that realtors get very little of it actually. A sizable portion goes into marketing the home and advertising it. What the realtor pockets is not so much at all.
Sell It Yourself
The best way to save on realtor commissions is to sell the home yourself. In fact, you end up paying nothing at all! The problem with this method is that it means then that YOU are in charge of doing everything the realtor does.
Much of what realtors do is aimed at spreading the word about your home. This means placing ads and listings. Now that we’ve got the internet to help us out, it’s easier than ever to handle this aspect of home selling yourself. There has been a sharp rise in For Sale By Owner homes in Canada in the years since the advent of the internet. There are sites where you can list homes yourself.
Flat Free Listing
You can also save on realtor commissions by hiring them for specific services only. This option is called a ‘flat fee listing.’ A change in Canadian law in 2010 allows you to use the Multiple Listings Service (MLS) yourself. This means that you can hire a realtor only for specific services rather than hiring them to do the entire listing for you. They simply list it for you in the MLS, and you handle everything else yourself.
Negotiate With The Realtor
Most people don’t realize that you can negotiate the commission rate with realtors. Everything is negotiable and most realtors will play ball; in fact, they general expect some negotiation with sellers. You can shop around with a few different realtors and see if they’ll give.
However, there is one downside to negotiating that you should be aware of. There’s almost always a little give and take. Since most of the commission money goes toward marketing, they may knock some of the price off but this will mean your home won’t get as widely listed. Keep this in mind when you’re negotiating and don’t cut corners if the listings are important to you.
Commissions may be high, but remember that they don’t just go into the greedy realtor’s pocket. Consider the above options for saving on commissions, and you can sell your home faster and, best of all, keep that commission money yourself.
