Realtor commission

[newbuyer]

can you negotiate the price with the builder by getting rid off the realtor from the table? I know that they get 4% just by referring you to the builder. I think is too much. Has anyone tried to approach the builder and tell them to give you 2% off and you promise to let go the realtor so the builder won't have to pay them 4%?

 

[AKS]

no success. Only time they offered me discount was when I was at Pier 27. They offered 1% and a free locker if I went without an agent. So unless the builder is desperate, they might not give you 2% unless that was their incentive in the first place, with or without agent.

 

[simuls]

Everything is negotiable if you're willing to walk away. My last purchase they wanted $10 000 to go from 24 to PH (25) instead of the normal $1000, I offered $4000 and they took it. Same tactics you have to use with Rogers, bell... unless you're leaving they don't take you seriously. Negotiate upgrades, smooth ceilings, extended height cabinets, etc. I just got the upgrade list and all totalled, thru hard/polite negotiation and not including the above $6000, I managed about $13000 in free upgrades.

 

[AKS]

Everything is negotiable if you're willing to walk away. My last purchase they wanted $10 000 to go from 24 to PH (25) instead of the normal $1000, I offered $4000 and they took it. Same tactics you have to use with Rogers, bell... unless you're leaving they don't take you seriously. Negotiate upgrades, smooth ceilings, extended height cabinets, etc. I just got the upgrade list and all totalled, thru hard/polite negotiation and not including the above $6000, I managed about $13000 in free upgrades.

Which project was that? I find it hard to negotiate. I usually end up walking away or else settle for their terms if I really wanted to get it.

 

[newbuyer]

Hi A. Thank you for the reply.
I'm a first time home buyer, and recently bought pre construction condo at Emerald city. I didn't know any agent before. I found him on the net as I searched for Emerald city's pricing. His website is very informative as it has price listing for some pre construction condos in Toronto. I rather to find out a condo price on the net than go to the site and got disappointed because the price is over my budget. Anyway, that was the only thing good from him. I only met him one time which the day the he introduced me to Emerald city. He helped me asked for the $15,000 credit which was not offer anymore at the time. On the same day, he left me there by myself because he had another appointment elsewhere. I was overwhelmed with the whole process, and had to call back and forth to him to get an answer while I was there. The rest of the negotiation was mainly done by me and my lawyer. So far, he has been calling me to follow up with the sale. That was it.
When I found out that he gets 4% of the purchase price, I was feeling in disbelief. Is it that easy to make over than $10,000 by being a realtor? All he did just spent few hours with me on the site and visited the site without me one time. I was expecting full service from him. At least offer me a ride home or something since I take TTC to get home. Or, do the negotiation for me instead of me calling back and forth with the builder. One big thing that he also forgot to mention is the fees associated with the closing which amounted to 3-4%. I was aware that closing cost is 1.5%, but it is different for pre construction condo, because of the development fees and etc. He didn't mention this to me. Also, he didn't mention or remind me about the HST which is not included in the current purchase price. My lawyer has been great with informing and helping me with these issues.
Now for meeting me one time on the site and go to the site one time for me to negotiate on the extension for the deposit, is it worth 4% commission?? That is a big NO NO. 1%-2% is understandable. But 4% just for doing what he did? I should change my profession, I guess.
Sorry about my rant, but he just made my first experience with realtor really bad and will stay with me forever. I don't think I can look any realtor differently unless one can impress and change my mind of them. And you know how fast the word travels.

Hi! I came across your post about saving on the agents commission part. I'm an agent myself just so you know. Most developers probably will not cut commission because if they do that they'll tick off the agents who work hard to refer people to them. Trust me there's a lot of work behind the scene that buyers don't see. What I do is educate my clients about the project, the area, the other projects and see which is the best option for them to take because we have more experience and knowledgeable than most buyers. So it's really invaluable to them if they get the right advice. Maybe they don't know the inside info about the condo and we do. They may not have researched everything themself like you. I could save them from making the biggest mistake of your life. As well there's a lot of questions from buyers about the rules and legal side that have to be explained.

So getting advice from a professional never hurts and it's free so why not use it to your advantage! Is it worth $5000 or $10,000? Absolutely. If the agent is really good and honest you want to have a long term relationship with them. It's like having a good lawyer and doctor you can rely on. It's critical to have a good agent to look after your investment. Even later on, if someone bought the condo from me I can help them sell it and give them a great selling percentage because they gave me business before. I give all my buyers a cut of my commission from the sale. Not a lot of agents do that, but I do. And it's the "sales" type of agents that gives us the bad rap. They'll only say "oh buy that, it's really good" for everything. Those are the agents to stay away from.

I was just trying to point out that you really should partner with a trustable agent who can give you good advice. If you need any help let me know. My name is A. N .and I'm a condo specialist.

Thanks

 

[Devils Advocate]

What you neglected to mention was who the agent was legally "working for"? The following may shed some light on the relationships and duties between clients and their agents.

In numerous instances, "the Agent" is actually "working for" the seller, either directly or indirectly and is only "working with" a buyer, and therefore is compelled under law to act in the best interest of their client, the seller.

The reverse of this, is where a buyer specifically engages the services of a "buyer's agent" and the buyer's agent is also compelled under law to act in the best interest of their client, the buyer.

If a buyer engages the services of an agent under a "Buyer Brokers Agreement" and thus establishes a "fiduciary relationship" between buyer and agent and the agent subsequently breaches their fiduciary duty to their client, the agent can be held liable for any loss and/or costs stemming from that breach as well as forfeiting any entitlement to remuneration.

Important Notice: This information is provided as basic educational information by the author and is not a substitute for the advice of an expert and/or the advice of a lawyer. There is NO representation as to legality, accuracy, correctness of the herein information and the reader is strongly urged to consult a lawyer in the relevant jurisdiction to ensure accuracy before acting on this information .

 

[newbuyer]

I remember seeing one piece of document where it says "buyer's agent".
I regreted that I called him. I could have gotten myself a better deal knowing I can save the seller 4% on realtor commision. I understand the need to be represented by realtor if you are looking for a resale home. However, unless there is a VIP deals, there is no need for a realtor for purchasing new homes.

 

[AKS]

I remember seeing one piece of document where it says "buyer's agent".
I regreted that I called him. I could have gotten myself a better deal knowing I can save the seller 4% on realtor commision. I understand the need to be represented by realtor if you are looking for a resale home. However, unless there is a VIP deals, there is no need for a realtor for purchasing new homes.

There's need for a realtor depending on the time of sale. If it's VIP sales (pre-public sale), you won't have access to those prices. You can only get them with realtors because public buyers walking in will get kicked out/rejected.
That is the time to negotiate to share commission with your realtor.

If the prices are public prices, you don't really need a realtor. You can just walk in and try to negotiate a good price. Ask what they are willing to give you without a realtor.

Some builders give realtors 3-4% commission. Portion of the commission will go to the RE agency they belong to. 1.5% to agency. 2.5% they take. However their commissions are taxed. So they probably get a bit less. Some are willing to share a portion of their commissions with you. But you have to negotiate with them ahead of time.