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Realtor Commission Rate for million dollar homes

azureray

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Does anyone have any idea how much realtor commission a buyer / seller should pay for luxury million dollar homes? I know typically each realtor charges 2.5%, just want to get a sense whether this rate is negotiable on higher price points. And if so, how much discount is considered as normal?
 

cdr108

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you could also try calling Sotheby's, Kalles or some other realtors office that deal with high end luxury products, but then again what's your definition of "luxury million dollar home"?
 

azureray

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Maybe not so much about luxury, just large ticket purchases. Nowadays a two million detached house could have little to do with luxury in some locations unfortunately.

you could also try calling Sotheby's, Kalles or some other realtors office that deal with high end luxury products, but then again what's your definition of "luxury million dollar home"?
 

cdr108

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lol .... that's what i was trying to say without sounding being insincere.
a million dollars doesn't buy much in Toronto in many locations, and we're not even talking about exclusive neighbourhoods like Rosedale or Bridle Path, etc.
 

rbt

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Does anyone have any idea how much realtor commission a buyer / seller should pay for luxury million dollar homes? I know typically each realtor charges 2.5%, just want to get a sense whether this rate is negotiable on higher price points. And if so, how much discount is considered as normal?

IME, owners of higher priced properties are the least likely to negotiate the commission rate. Very few agents are capable of selling these properties at a high value and you need a selling agent with lots of the right connections. Just listing on MLS isn't going to do it, there's a lot of cold calling.

Also, if it is luxury, you will want a listing agent who will be there at the showings and vet the finances potential buyers prior to arranging a showing. Theft is a significant problem with luxury properties. It takes a good agent to make this process feel exclusive and value-add for the buyer rather than a screening process for the seller.

You don't want to underpay the agent who brings your buyer or you may find yourself without that buyer.
 
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azureray

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Thanks and I would assume the commission rate is typically 5% here in Toronto which will be split between seller and buyer agents?

IME, owners of higher priced properties are the least likely to negotiate the commission rate. Very few agents are capable of selling these properties at a high value and you need a selling agent with lots of the right connections. Just listing on MLS isn't going to do it, there's a lot of cold calling.

Also, if it is luxury, you will want a listing agent who will be there at the showings and vet the finances potential buyers prior to arranging a showing. Theft is a significant problem with luxury properties. It takes a good agent to make this process feel exclusive and value-add for the buyer rather than a screening process for the seller.

You don't want to underpay the agent who brings your buyer or you may find yourself without that buyer.
 

Burton Realty

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A buyer should not expect to pay any commission, although it can happen. Sellers pay 5-6% of the net proceeds in commission on closing. The buyer's rep will take half this amount. If the seller's agent brings the buyer (multiple representation) the seller's rep claims the entire commission. Million dollar homes are plentiful here in Toronto, but its only a small part of the market. Most professionals will charge 5% or more, regardless of the listing price.

On a million dollar property, a seller can expect to pay between $50,000 to $60,000 in commission.
 
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TORealtyBlog

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That's exactly what I revealed today on Toronto Realty Blog. Most million dollar homes use a Realtor and pay 5% commission, 2.5% for listing agent and 2.5 for Buyer's agent. Discount brokerages tend to list cheaper properties and are not usually the ones managing quality homes... My argument is that their is a reason for this.
 

Burton Realty

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exactly. Considering all of this, you can now see why "1% commission" is a scam. Realtors would be out of business if they only earned 0.5% before the split with their broker.
 

JameMoring

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There is not any fix percentage or amount of commission on real estate property. almost commission rate is 5% on both buyer and seller side. Thanks a lot
 

TORealtyBlog

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There is not any fix percentage or amount of commission on real estate property. almost commission rate is 5% on both buyer and seller side. Thanks a lot

I have no idea what you are trying to say. No one is suggesting that commissions are fixed. All I have said is that you get what you pay for with discount brokerages... You fill in the gap!
 
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from my experience (and from my own practice) my commission rates depend on a number of factors: if the seller plans to also buy, what services the seller does or does not want performed, how much the property will most likely sell for. I also give discounts and donate a portion of my commission to charities so rarely do my commission rates get up to 5%. Its all about what services are offered and the agent.
 

recharts

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I have no idea what you are trying to say. No one is suggesting that commissions are fixed. All I have said is that you get what you pay for with discount brokerages... You fill in the gap!

You are suggesting there is a gap someone should fill in
Put yourself in the shoes of a less lucky RE agent who has not sold much this year (probably this is common now).
He or she would prefer to charge a smaller commission rather than selling nothing this month or this year...
I just wonder why the demand and supply rules apply no matter what when we have to buy houses you sell but do not apply when we buy your services!
 
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