All real estate agents will need to work in the best interests of their client if they operate exclusively as your listing agent or buyer's agent, but might not in a dual agency transaction. Your real estate agent will represent only your interests, and they will work to make sure your real estate transaction goes smoothly. Their roles and responsibilities will differ if they are working for the home seller or for the home buyer.
For home sellers, your real estate agent will:
Your listing agent will find your home's current market value by looking at comparable homes in your neighbourhood, their listing prices and listing history for recent sales, along with inspecting your home for anything that could add value or reduce value. This method is called a comparative market analysis (CMA), since it uses comparable homes to give an estimated home value for your home.
A CMA is an informal way to estimate market values which can be used to determine an appropriate listing price, although CMA's usually only produce a range that your home value might be within. For a more rigorous and formal process, a real estate appraisal can attach a specific market value to your home. CMAs can be conducted by your listing agent, but real estate appraisals can only be done by licensed home appraisers.
A listing agent working in the best interests of a home seller will try to maximize the home sold price, and they're also incentivized since their commissions are also based on how much the home is sold for. Your listing agent may decide to use pricing strategies when setting your listing price. One strategy is listing your home for well below market value, with the goal of driving interest and having plenty of offers all lined up. Competing buyers will try to outbid each other, and a bidding war may drive up the price well beyond the home's market value. This idealistic scenario of selling for well over asking might not always materialize, and it can also be frustrating for buyers.
Another strategy is pricing your home well above market value. Your listing agent will then negotiate with buyers to bring the price down, but hopefully still above the fair market value. This strategy can also backfire, such as not receiving any offers at all and just sitting on the market. Frequently relisting your property to avoid having a large number of days on market might also be a red flag for home buyers.
The third strategy is to list your home at market value. While you might not have a bidding war or be able to catch a buyer willing to pay well above market value, you won't be leaving any money on the table either if other pricing strategies don't work out. You will work with your real estate agent to find the best selling price for your home.
The next step is to make sure your home is ready to sell. Home buyers will closely examine your home, so you want to make sure that everything is in perfect condition. This includes repairing things that are broken, such as a leaky faucet, or cosmetic damages such as holes in walls or chipped counters. You might want to spruce up your home by adding a fresh coat of paint, doing landscaping, and replacing lights.
Once your home is clean and presentable, your real estate agent may have your home staged. Home staging can make your home much more attractive to buyers, and can make it more likely to sell for a higher price. A study by the National Association of Realtors in the United States found that half of sellers' agents saw an increase in the dollar value of offers ranging from one percent to 10 percent. Even a one percent increase in your home sold price can add thousands of dollars in extra value, which can more than recoup the cost of home staging.
One thing that's needed for your home listing is for photos of your property. Having professional real estate photos can entice potential buyers to your listing, while sub-par photos can chase away buyers.
Your listing agent will post your home listing on a multiple listing service (MLS), which will then also be available to the public on publicly accessible real estate websites. Your agent will also write your listing's property description, which can be important for many home buyers.
Once your home has been listed, your listing agent will market your home. This can include putting up a lawn sign, having advertisements in your local area, and using their network and real estate leads to find potential buyers. Agents may also use social media and have open houses.
Negotiations will be handled through your listing agent, and once a suitable offer is accepted, your agent will guide you through the closing process.
For home buyers, your real estate agent will:
Home buyers will have preferences that will need to be accommodated during your home search. This can include having a price range, preferred neighbourhood, home type, and home size.
Your buyer's agent will have access to MLS, which allows them to view listings of homes for sale. For homes not listed for sale on MLS, your agent may also try to find pocket listings or exclusive listings that are privately listed for sale. Your agent will inform you of listings that they think you would be interested in, or they may also send you a list of listings that have been filtered according to your preferences. This might be an automated email, such as one a day or once a week.
Your local real estate agent will have experience and knowledge on the local housing market and on the location of the home. Your agent might point out things that might increase the value of your home in the future, such as new developments that will introduce amenities. If you're not familiar with the area, having a buyer's agent can help you be informed about potential issues, such as the local crime rate, commute times, lack of local schools, and the desirability of the neighbourhood.
House showings are different from open houses. With an open house, you’ll be able to view the home freely within certain hours on certain days. With a home showing, you’ll need to schedule one with the seller. Your real estate agent can arrange home showings for you, and they will also accompany you during the showing. The seller's listing agent will also be at the home showing. At a home showing, you'll be walked through the home by your buyer's agent.
If you have decided that you want to purchase a home, your buyer's agent will negotiate and submit an offer to the seller. This can include contingencies and conditions to the offer.
Your real estate agent can help connect you to other real estate professionals, such as home inspectors and home appraisers. Agents can also help you with securing financing for the purchase of the home, such as by referring you to a mortgage lender or mortgage broker. Once your offer has been accepted, your agent will lead you through the paperwork required for closing, such as agreements and contracts.
Reviews from previous clients are important when you're trying to find a reliable real estate agent. When looking at reviews to try to judge an agent's quality of service, you should focus less on their numerical ratings and more on their individual client reviews. Some websites that provide customer ratings and allow people to leave reviews include Facebook, Google, and Yelp.
Google Reviews allow anyone searching for the real estate agent to see reviews and leave their own reviews. Customers can also leave Facebook reviews on the real estate agent's business Facebook page. However, agents will often solicit their clients to leave reviews on these platforms, and some platforms allow customers to leave a numerical rating without any written review.
This makes it especially important for you to consider reviews from more than one source. One way to quickly see customer reviews from multiple sources is by using WOWA.ca, which shows real estate agents near you with ratings and reviews from Google and past clients. Having a list of local real estate agents and their customer reviews allow you to easily compare agents and brokers in your local area.
Real estate agents get paid a commission whenever they sell a home or help a buyer purchase a home. In Canada, real estate commissions are usually paid by the seller of the home. When a home is sold, the commission is taken off of the final sale price, which means that the proceeds to the seller from the sale of the home is reduced by the commission amount. For buyers, your buyer’s agent will receive a share of the commissions, which is called a cooperating commission. While buyers won’t have to directly pay their buyer’s agent, they will indirectly be paying for their services through the commission being built into the home price. This also means that if you choose to not purchase a home or sell your home, then your real estate agent will not be paid anything.
For most transactions, the real estate commissions will be a percentage of the selling price of the home, with this being shared between the buyer agent and listing agent at an agreed-upon commission split. Some listing agents may reduce their own share of the commission and give buyer’s agents a higher commission in order to attract them to your listing. Dual agents that represent both the buyer and seller will be able to keep the entire commission for themselves. Real estate agents will also need to split their commission with their broker. Once the buyer has paid for the home on the closing date, the listing brokerage will distribute commissions to the real estate agents that were part of the transaction.
Real estate commissions can be a percentage, a flat fee, or a combination of a percentage and flat fee. Some provinces also have tiered rates based on the price of the home. For example, real estate commissions in Ontario are usually 5% for the entire amount, while British Columbia real estate commissions are usually 7% on the first $100,000 and 2.5% on the remainder. Naturally, housing markets with higher home prices will lead to higher commissions for real estate agents.
The average selling price of a home in Toronto was $1,089,536 in June 2021, while the average price in Ottawa was $659,929. Given a 5% commission rate, the average commission for a home sold in Toronto would be $54,476 and the average commission in Ottawa would be $32,996.
However, larger markets with more lucrative commissions also attract more real estate agents that you will be competing with for clients. The Ottawa Real Estate Board (OREB) has 3,400 real estate agents and brokers in the Ottawa area. In June 2021, there were 2,132 home transactions in Ottawa. This is equivalent to 0.63 transactions per Ottawa real estate agent per month.
In comparison, the Toronto Regional Real Estate Board (TRREB) has 62,000 real estate agents and brokers in the Greater Toronto Area, with 11,106 transactions in the GTA in June 2021. This works out to be 0.18 transactions per Toronto real estate agent per month. Toronto real estate agents are fighting over almost double the average commission compared to Ottawa, but they have to contend with almost triple the competition with fewer transactions per agent when spread out evenly.
Tiered real estate commissions, commonly found in British Columbia, Alberta, and Saskatchewan, will have a higher rate on the first $100,000 and a lower rate on the remaining amount. In British Columbia, it’s usually 7% on the first $100,000 and 2.5% on the remainder. In Alberta and Saskatchewan, it’s usually 7% on the first $100,000 and 3.0% on the remainder. For a home that was sold for $500,000, your BC commission would be $7,000 on the first $100,000 and $10,000 on the remainder, for a total commission paid of $17,000.
Saskatchewan also has another method of calculating commissions, with 6% in the first $100,000, 4% on the next $100,000, and 2% on the remaining amount. For example, if a home is sold for $500,000, you will pay $6,000 for the first tier, $4,000 for the second tier, and $6,000 on the remainder. This gives a total commission of $16,000.
Real estate agents work for a real estate brokerage, which will collect a portion of the agent’s commission. This split is usually 20% to 30% to the brokerage and 80% to 70% to the agent, but the brokerage’s share can be higher, such as for newer agents with less experience. This split is after the buyer’s agent has received their share as well.
If you’re a listing agent, you will pay both the buyer’s agent and your brokerage. For a $500,000 home with a 5% commission, the total commission would be $25,000. If you share 50% with the buyer’s agent, you will be left with $12,500. 20% of this will go to your brokerage, leaving you with $10,000. For listing agents, the costs of marketing your property will be paid for with part of their commission. This includes home staging, photography, advertising, and cleaning, and may add up to a few thousand dollars, reducing the amount that listing agents will make.
Real estate commissions are negotiable, but it can be difficult to lower them significantly. Real estate agents can be more likely to accept a lower commission if it's easy to sell your property, if the home has high price and will likely result in a large commission, or if they will be less involved in the sale of the home, such as by not marketing or advertising your listing as extensively or by using lower-cost options.
Discount real estate brokers can offer low commissions or a flat fee for home sellers. For example, One Percent Realty offers commissions as low as 1% plus $950 for homes over $700,000, or a flat fee of $7,950 for homes under $700,000. About half of the flat fee goes to the buyer's agent, which means that the buyer's agent will also be receiving a much lower commission. This can affect how visible your home is to buyers, as agents can be less likely to prioritize your home over other listings.
Some discount brokerages, such as Purplebricks, charge a flat fee and allow you to choose to pay zero commission to buyer agents, or you can set the commission to as much as you'd like. When working with an ordinary real estate agent, you’ll still have a say in how much commission you want to offer to buyer agents.
If you want to make it more likely for a full-service real estate agent to lower their commission, one way would be to agree to drop some of their services. This can include paying for your own services or dropping open houses. This can backfire as agents want a smooth transaction, and skimping out on some services can potentially affect the marketability or attractiveness of your home listing. That's why even some discount brokerages still recommend that you pay the full cooperating commission to buyer's agents.
Real estate agents may also be likely to lower their commissions if they are a new agent looking for experience and transactions, if you're looking to both buy and sell your home with the same agent, or by using a dual agent and sharing the same agent as your home buyer.
If you want to skip paying commissions entirely, you can sell your home by yourself. Homes that are for sale by owner (FSBO) will mean that you'll have to handle everything that a listing agent usually does, but you'll save 2.5% of your home's price and significantly lower the cost of selling your house.
Some real estate agent marketplace platforms that allow you to find real estate agents, such as WOWA.ca, have built-in savings with some agents. You can list with low commission agents for as low as a 1% listing fee.
Yes, you can! With WOWA.ca, you can message as many agents as you need to for a free, no-obligation consultation. We recommend messaging at least three agents to make sure you find one that works best for your unique situation.
Yes, we show the real estate transactions of all licensed WOWA.ca real estate agents including sales representatives, brokers, and brokers of record.
Yes, WOWA.ca validates the transactions of our licensed real estate agents. We are one of the first platforms in Canada to show the transactions of real estate agents and empower home buyers and sellers with this level of authenticity and transparency.
Not necessarily. Many experienced real estate agents do not apply to become brokers. While brokers take additional courses and exams to obtain a broker’s license, the broker’s license is only required for those who want to own or manage a real estate brokerage.
The largest real estate brokerages and franchises in Canada are:
The brokerage alone will not tell you how much value a particular agent can bring you. Brokerages can provide a brand name, but ultimately it’s your real estate agent that will do the work to help you buy or sell a property. You can find poorly-rated agents in brokerages of some of the largest real estate franchises and you can find highly experienced agents in less well-known brokerages.
In Canada, there are over 130,000 real estate agents represented by the Canadian Real Estate Association (CREA). Ontario has the most real estate agents in Canada with more than 79,000 real estate salespersons and brokers and 38 local real estate boards in Ontario. Of those 79,000 agents, over 56,000 are part of the Toronto Regional Real Estate Board (TREB). B.C. is second with more than 23,000 real estate agents and 11 real estate boards.
Real estate agents, brokers, and brokerages are provincially licensed in Canada. To check to see if your real estate agent is registered and licensed, your provincial regulator’s website will have a database that allows you to search by name, brokerage, and city. For example, if you’re looking to buy a house in Ontario, you would check RECO’s database of licensees.
A Buyer Representation Agreement (BRA) is a contract that can lock you into using your real estate agent for a certain period of time, which is usually three to six months. This can help prevent buyers from using an agent's services and switching to another agent to complete the transaction, which will cause the first agent to not be compensated for their time. Exclusive BRAs mean that you can only have one agent when searching for a home, but you may be able to use another agent if the search criteria is different.
BRAs can protect buyers and sellers by having the terms of your relationship in writing. This can include the commission rate that you have agreed to pay, and any disclosures that your agent might have, such as if they are dual agents. Even though BRAs can force you to work with a specific agent or brokerage, it still doesn't force you to buy or sell a home with them.
An agreement of purchase and sale or a contract of purchase and sale is a real estate contract that spells out the terms of sale. The purchase and sale agreement is usually written by the buyer's agent based on a standardized form. Real estate purchase agreements can't usually be cancelled with penalties, unless there was a contingency or condition that was met, such as a financing contingency or appraisal contingency.