Real estate agents typically charge commissions as a percentage of the final sale price of a property. However, there are different ways that real estate agents charge commissions, including:
Percentage of the sale price: This is the most common way that real estate agents charge commissions. The percentage can vary, but it’s typically around 5-6% of the sale price.
Fixed fee: Some agents charge a fixed fee instead of a percentage of the sale price. This fee may be based on the value of the property or the amount of work involved in the transaction.
Hourly rate: In some cases, real estate agents may charge an hourly rate for their services. This is more common for consulting or advisory services rather than actual property sales.
Performance-based commission: Some real estate agents may offer a lower commission rate if they meet certain performance targets, such as selling the property within a certain timeframe or achieving a higher-than-expected sale price.
Tiered commission: This is a commission structure where the percentage charged by the agent decreases as the sale price of the property increases. For example, the agent may charge 6% on the first $100,000 of the sale price, 5% on the next $100,000, and so on.
Dual agency (Double-ended) commission: In some cases, an agent may represent both the buyer and the seller in a transaction. In this situation, the agent may charge a higher commission rate to account for the increased workload and potential conflict of interest.
It’s important to note that commission rates are negotiable, and different agents may have different commission structures. As a seller or buyer, it’s important to understand the commission structure and negotiate with your agent to ensure you’re getting a fair deal.
The standard rate REALTORS® charge in Saskatchewan is tiered; 6-4-2, broken down, 6% on the first $100,000, 4% on the second $100,000, and 2% on the balance.
For example, if you sell your property for $500,000, the total real estate fees would be calculated as follows:
- 6% on the first $100,000 = $6,000
- 4% on the second $100,000 = $4,000
- 2% on the remaining $300,000 = $6,000
This results in a total real estate fee of $16,000, split between the buyer’s and seller’s agents.
It’s important to note that the standard fee structure is flexible and can vary depending on the real estate agent or brokerage you choose to work with. For example, some agents may offer a lower commission rate to attract clients, while others may charge a higher rate for their specialized services or expertise.
When working with a real estate agent, reviewing their fee structure carefully and ensuring you understand all costs associated with buying or selling a property in Saskatoon is crucial. You should also ask about any additional fees or charges that may apply and get everything in writing to avoid surprises later on.
In addition to real estate fees, it’s also essential to consider other costs associated with buying or selling a property, such as legal fees, property inspection fees, and additional closing costs. These costs can add up quickly and significantly impact your overall expenses.
By carefully reviewing your options and working with a reputable agent, you can help ensure you get the best possible value for your money and minimize your overall expenses when buying or selling a property.
The table below shows the common commission fees a real estate agent may charge to sell your home.