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Buyer Beware: This real estate commission plan could have your agent working against you.

Buyer Beware: This real estate commission plan could have your agent working against you.

If you're in the market to buy a home you should definitely be aware of this potentially problematic commission plan that could have your agent working against you. This two-minute video explains how, or review the transcript below.



Transcript

Home buyers occasionally ask the question, how does a real estate agent get paid to help me buy a home?


And in this province, in most cases, the real estate commission that the buyer's agent earns is paid for by the seller or generated by the transaction, and in most cases, it's a percentage of the sale price.


Commissions are problematic in the sense that, as a buyer's agent, I'm charged with the responsibility to help you get the lowest price, but I actually get paid more money if you pay more for a house. So you can see how that can be problematic.


In Saskatchewan, most real estate listings pay on a declining scale, though, so I might earn 3% on the first $100,000 of the sale price, 2% on the second $100,000, and 1% on the balance, so ultimately, if you pay an extra $5000 for a house, I make an additional $50, and I would say, for most people, that's probably not enough to influence them to bad behavior.


But not all commission programs work that way. In fact, there are some properties on the market from time to time that work on an inclining scale, and an agent might be offered 20% on the final portion of the selling price. So if you pay an extra $5000 for a home, they get an extra $1000 in their pocket, and you should know that.


So when you're ready to write an offer on a home, ask the real estate agent, what is the commission being paid on this home? You have a right to know that, you have a responsibility to know that, so that you can understand whether or not there might be some biases at play there, that you should take into account when you're deciding how much to pay.


Ask.


You have a right to know.


________________________________


I'm upping my Facebook and Instagram game. Follow me to receive updates on the Saskatoon real estate market and insights I've gained managing thousands of real estate transactions.


TeamFisher.com hosted nearly a quarter of a million user sessions and displayed more than 1.2 million pages to our visitors in 2019. If you have a Saskatoon area home you'd like to sell, we know how to get people looking at your home. Reach out to me directly to engage our team and learn about our processes.


I’m always happy to answer your Saskatoon real estate questions.  Reach out by voice or text at 306-241-6676 or email me at norm at teamfisher.com


Norm Fisher

Royal LePage Vidorra

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Norm Fisher, TeamFisher

About Norm

Licensed in 1993, Norm brings a wealth of experience to TeamFisher. He has worked in every imaginable capacity including sales agent, office manager, team leader, broker and now, broker/owner. Norm has written a weekly review of the Saskatoon real estate market for more than 650 consecutive weeks which may make him the most consistent industry blogger in the world.Less...

Licensed in 1993, Norm brings a wealth of experience to TeamFisher. He has worked in every imaginable capacity including sales agent, office manager, team leader, broker and now, broker/owner. Norm has written a weekly review of the Saskatoon real estate market for more than 650 consecutive weeks which may make him the most consistent industry blogger in the world.

Norm is known for his passion for technology and can most often be found exploring and experimenting with the next big thing in real estate marketing. He was the first Saskatoon real estate agent to promote a home online and has been an early adopter of new technologies ever since. “Everything about this business has changed over the past 20 years, and it will happen again in the next ten. An open mind and a curious attitude are all that’s needed to continue to find new ways to serve our clients by delivering a faster, smoother, worry-free transaction,” says Norm.

In his spare time, Norm enjoys Crossfit and cycling, some years accumulating over 2,000 kilometres on the road. He’s a strong supporter of the Royal LePage Shelter Foundation and enjoys raising funds by joining fun, fitness-related initiatives like the Grouse Grind for Shelter. In 2015, he trekked the Peruvian Andes to Machu Picchu. In 2017 he walked the southern highlands of Iceland across mountains, sand, snow, ice, lava fields and forest for seven days. Collectively those initiatives raised over a million dollars for Canadian women's shelters.
 

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