Buying a home can be a thrilling and exciting experience but grasping all the details may be difficult. Therefore, the vast majority of buyers prefer to work with a realtor who is familiar with and understands the intricacies of buying and selling real estate. Realtors are available to help you through the process and will be a source of information for finding the right home at the right price. It will be the most important and expensive investment when hiring a professional to sell or help buy a home.
Many homebuyers and sellers are unsure about who pays the real estate agents involved in the transaction - so the big question is, who pays the commission?
Who pays the commission for the buyer’s agent?
The seller’s realtor is the one who is selling the home and has it listed on the MLS. They focus on the seller’s requirements and interests, and work on behalf of the seller to obtain the best price and terms possible. The buyer’s realtor has fiduciary obligations to the buyer and is responsible for safeguarding their interests both during and after the sale.
The commission is paid to both the listing agent and the buyer's agent, meaning that each agent will receive a share of the sale revenues from the seller when the house sells. When the property is listed, the commission is agreed upon in advance between the seller and the seller's agent, and is also stated within the listing contract.
What is the commission for a real estate agent?
The commission depends on the full service or partial services that the Listing Agent provides. The buyer’s agents’ job is to help their client find the right home and provide advice or any help needed. Realtors who work in the GTA charge between 3.5% and 7% of the final selling price, which is agreed upon by the seller and the seller's agent before the home is listed. After then, the money will be shared between the buyer’s agent and the seller's agent. If there is only one agent, he or she will receive the entire listing commission.
All listing agreements will include a section stating the exact amount of the Realtor's fees as well as what the Realtor will offer the cooperating agent representing the buyer. This price can only be altered if all parties involved in the sale agree in writing.
What if the Seller fails to pay the commission owed?
If a seller backs out of a deal while the house is under contract, the seller may be forced to close or could be sued for breach of contract. Of course, the repercussions are determined by the conditions of the house sale deal. However, the seller could face legal and financial consequences from both the buyer and their listing agent if they decide to back out of the contract abruptly and without a contingency that specifically enables the seller out of the transaction. In this particular event of a default or breach of a basic provision of the contract, the buyer may be relieved of the obligation to complete the transaction while still being entitled to additional compensations such as the deposit and/or damages.
A buyer representation agreement or any real estate contract generally spell out the ramifications of various types of defaults, as well as the precise remedies that may be available in the event of a default or breach of contract.
Susan Macarz is focused on how many people and families she helps to achieve their real estate goals. She works for the best interests of her clients; the final result is that everyone has a positive experience.
If you have any questions or interests in looking for a new home, please contact Susan today!