I wanted to talk about what First Time Home Buyers can expect to pay their Realtor for commission. This is a topic that comes up very often and most First Time Home Buyers think that when they get started in the home buying process that they need to pay someone, but that's not necessarily the case, well usually...
The majority of the time, and I mean 99.9% of the time, sellers pay both ends of the transaction. By both ends I'm referring to (a) the listing brokerage who is selling the property and (b) the buyer brokerage who is bringing the buyer. From the proceeds of the sale the sellers will compensate both brokerages for their service.
So essentially what this means is that the buyer is enlisting the service of a Professional for months, sometimes years at a time for absolutely FREE, yes you heard right FREE! FREE! FREE! Now where in the world does a service like this exist!
Now a word of caution ... when you finally find a home that you would like to purchase your Realtor will have you sign what is called a (BRA), which stands for Buyer Representation Agreement. This agreement is used to establish a representation or agency relationship so that your Realtor has an obligation to you as the client. In this agreement it states that if you the buyer purchase a home within a certain time frame and within a geographical location, the Realtor is to be compensated for their service. Here is a word of caution ... if the agreement states that the Realtor is to be compensated 2.5% of the purchase price (which in the GTA is the norm), and the seller only pays a 2.0% commission, you as the buyer may be on the hook to come up with the additional 0.5%.
So please make sure that you read everything you sign! Ask many questions and keep the lines of communication open and upfront.
Until next time, happy house hunting.
The majority of the time, and I mean 99.9% of the time, sellers pay both ends of the transaction. By both ends I'm referring to (a) the listing brokerage who is selling the property and (b) the buyer brokerage who is bringing the buyer. From the proceeds of the sale the sellers will compensate both brokerages for their service.
So essentially what this means is that the buyer is enlisting the service of a Professional for months, sometimes years at a time for absolutely FREE, yes you heard right FREE! FREE! FREE! Now where in the world does a service like this exist!
Now a word of caution ... when you finally find a home that you would like to purchase your Realtor will have you sign what is called a (BRA), which stands for Buyer Representation Agreement. This agreement is used to establish a representation or agency relationship so that your Realtor has an obligation to you as the client. In this agreement it states that if you the buyer purchase a home within a certain time frame and within a geographical location, the Realtor is to be compensated for their service. Here is a word of caution ... if the agreement states that the Realtor is to be compensated 2.5% of the purchase price (which in the GTA is the norm), and the seller only pays a 2.0% commission, you as the buyer may be on the hook to come up with the additional 0.5%.
So please make sure that you read everything you sign! Ask many questions and keep the lines of communication open and upfront.
Until next time, happy house hunting.
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