A real estate agent in Canada must work under a brokerage in order to deal with real estate. For many, this means seeking out what they consider to be the cheapest. This is in reference to the split they will have to share with the broker each time they do a transaction when operating under the broker. Although price should not always be the deciding factor there are options for finding brokers that offer cheap splits. The following is a list of five ( in no specific order) they may want to consider in Canada.
- Homeworks Realty
- Purple Bricks.ca (mention)
This broker is offering agents the chance to complete their real estate deals based on a flat fee. It operates throughout the province of Ontario. The company is offering two packages for real estate agents with the option to be able to switch between plans if they give thirty days’ notice.
With this plan, the realtor keeps 95% of the commission charged and the Brokerage gets 5%. The realtor is not held to any sales quotas.
Plan Two Sponsored Plan:
Agents receive an 80% split while the brokerage receives 20%. Agents get to earn revenue from other agents they bring into the brokerage. So for example one agent brings in another agent who earned $5,000 in the month. The referring agent gets 10% of this so they would earn $500. for nothing more than bringing that agent into the brokerage.
The agent also has some additional expenses they will be responsible for paying the brokerage which are:
- A fee of $119. each month
- $55. for every transaction that covers the cost of the brokerage review of the transaction and any risk management expenses. These fees apply to both plans.
What the Realtor Gets
- Aside from their commissions, the brokerage will provide the opportunity for the realtor to:
- the opportunity to offer flat fee services or additional services to their clients
- No min/max commission requirement
- Access to leads generated by FlatPrice
- A dedicated web page
- No restrictions on commissions that the agent wants to negotiate with their clients.
If an agent decides to retire and has opted into the sponsor plan that agent will get to continue earning 50% of the sponsored commission.
In the event of the death of an agent who opted into the sponsored commission plan, their family will continue to receive 50% of the sponsored commission.
One Percent Realty
This brokerage is offering services at a reduced rate with no compromise in services.
They are offering clients:
- A flat rate of $7,950 commission on all homes under $700,000. Out of this $3,500. goes to the buyer’s agent.
- For homes that sell for over $700,000, this broker charges a commission of 1% plus $950. The buyer’s agent gets 0.5% out of this for his commission.
With traditional sales, the commission rate can vary between 3.5% to 5%.
This is another broker that is also offering flat rates for commissions to keep it clean and simple. They market themselves as providing full-service real estate services at a slightly reduced rate.
The flat fee that they are marketing is as low as $2,995. so this indicates that the flat fee is going to be based on the sale price of the home. The higher the selling price of the house the higher the commission fee will be. They do not specifically outline how much they are paying to their agents.
This is one with a different approach and this platform is not a brokerage. They act more as an intermediary for hooking up clients with agents. The concept here is that agents get to bid for the client’s services. The client submits the information about the house they are putting on the market. Feeduck then runs a 24 auction to find the lowest bidder who is real estate agents that have an interest in listing the property. Clients then have the option of hiring the real estate agent that wins the bid, however, they are under no obligation to hire them.
Agents who use Feeduck are charged $170 if they win the auction ( plus taxes) based. This is for one “sell only”. For a single “buy only” the fee is $300 plus the taxes.
Feeduck does not accept discount agents or brokers.
Agents can only bid on properties that are applicable to the area that they service.
Agents have to factor in that they will have to pay a commission to the buying agent when determining their bid amount.
PurpleBricks.ca is another approach to offering low brokerage fees. This company does not even charge a brokerage fee but provides very little by way of real estate agent services. Clients who want to use real estate agent services will have to pay for them on a per fee basis.
This company is offering clients services for 0.59% commission. It outlines potential savings that a client could save on commission fees but does say this is exact. So it is a little sketchy as to how the fee structure works. It appears as though the client can determine what amount of commission they want to pay. Some offer a flat fee while others will offer 2% plus the 0.59% which appears to have to be included in any commission offerings. This is a program being offered what they call the CB FlexRate and it works in conjunction with a cooperating broker. For example, an agent that you are using from another broker that is going to have their agent show your home to a potential buyer. It is unclear just how much the agent receives out of any negotiated commission. Although it would seem that perhaps Point50 would get their .58% share and the agent would get the rest.