Selling your home is a large transaction that can involve a lot of negotiation. That doesn’t only include talking the price and other terms with a potential buyer — you can also negotiate with your real estate agent.
If you’re successful, you can close the deal with more money in your pocket. And considering home prices, the amount can be significant. Below, CNBC Select offers tips on how and when you can negotiate with your real estate agent.
What you need to know about real estate commissions
How does the real estate commission work?
A real estate commission is a fee the home seller pays at closing to the buyer’s and seller’s agents. The typical commission rate is 5% to 6% and it’s split evenly between the two agents (and the companies they work for). The seller pays out the money when the deal closes. Since it can be a considerable sum, sellers usually include the percentage they’ll lose to the commission in the asking price. According to Julee Felsman, branch manager and SVP of mortgage lending at online marketplace Guaranteed Rate, even appraisers are required to consider seller’s concessions when determining property values — and that includes agents’ commissions.
“Ultimately, I think we can all agree that the only person bringing money to the table on the closing of a home purchase is in fact the buyer,” she says. “The buyer is, has been and always will be paying for everything.”
How real estate commissions work may soon change
A federal jury in Kansas City, Missouri, ruled in October 2023 that the National Association of Realtors (NAR) and other real estate organizations conspired to artificially . The results of this case might change the rates home sellers pay real estate agents.
In rare situations, such as with a bank-owned property, a listing will indicate that only a portion of the buyer’s agent commission will be covered by the seller. However, even in these scenarios, the buyer’s agent often opts out of additional payment from their client.
Compare offers to find the best savings account
Are real estate commissions negotiable?
The property’s price isn’t the only negotiable thing in a real estate transaction. As a seller, you may be able to negotiate your agent’s commission as well. However, not many people exercise this opportunity. According to the 2023 data from the NAR, only 22% of sellers brought up the topic of commission fees, and the real estate agent was willing to negotiate. Another 5% also initiated the discussion, but the agent wasn’t able or willing to negotiate their rates.
“[Negotiation] doesn’t happen that often,” says Aja McClanahan, a licensed realtor in Florida. “Seems like the consumer isn’t always aware of their ability to negotiate their commissions and some of the fees.”
Indeed, 15% of recent home sellers didn’t know commission rates could be negotiated. That said, if you do want to bring up the topic, it’s best to do so as you’re interviewing prospective agents. Learn about their marketing tactics, level of experience in your local market and what they can bring to the table. This way, you’ll know what you’ll be paying for — and you can begin the negotiation process.
How to negotiate with a real estate agent
You’re aware of what a real estate agent is offering you. But to successfully bring their rates down, you need to have something to offer as well.
Here are some examples of what that might be:
Multiple properties
According to McClanahan, “volume helps” — meaning if you can help the agent close on more than one property, they may be willing to bring down their rate.
For example, if you’re selling a home and buying another one, you can use the same agent for both transactions and negotiate their rates. Note that not all agents work as both a listing and buyer’s agent, so make sure you ask before assuming they do.
The more properties are involved, the better. For instance, this tactic can work for sellers “if they have a deal where they’re like, ‘Hey, can you help me buy a home for myself and my son?'” McClanahan says. “[Or] maybe they can bring a referral.” The same applies if you have multiple listing opportunities as a real estate investor.
High-value properties
Even if you only have one property to offer, you can still make the case to lower the commission. Specifically, the listing agent may be open to negotiation if your home is in a sought-after area or highly valued. For example, it could help if you’re listing a house priced at $2 million or more, “because the commission will be so high, you will have a lot of wiggle room,” McClanahan explains.
Willingness to work with a newer agent
Even if you can’t help your agent close multiple deals, there’s still a chance they will be willing to negotiate with you. This will more likely be the case if you’re working with a less established agent. A popular professional who’s been in the industry for many years might have a long list of home sellers they’re helping. A less experienced agent, on the other hand, might be working to increase their client volume and jump at the opportunity to close more transactions — even at a lower commission rate.
Finally, remember that commission isn’t the only thing you can negotiate. Real estate agents may also charge transaction fees.
“A lot of agents charge those,” McChalanah says, “Sometimes, buyers and sellers are not necessarily aware of that. So it’s a good idea to ask your realtor.”
Transaction fees are administrative costs associated with closing a sale and can total a few hundred dollars. You can always try to ask about lowering or even waiving these fees if negotiating the commission doesn’t prove fruitful.
Bottom line
A home sale is a large transaction. Even though your agent’s commission is a small part of it, it can amount to tens of thousands of dollars. Luckily, you can always try to negotiate. Remember that even if you aren’t selling a high-value property or can’t help the agent close on multiple properties, it never hurts to ask. The only time it’s guaranteed you’ll fail at negotiation is when you don’t start it.
Meet our experts
At CNBC Select, we work with experts who have specialized knowledge and authority based on relevant training and/or experience. For this story, we interviewed Julee Felsman, branch manager and SVP of mortgage lending at Guaranteed Rate. Felsman has been in the industry for over 25 years, helping homebuyers navigate the mortgage process. We also spoke with Aja McClanahan, a realtor with Real Broker LLC in the state of Florida. She has also been active in real estate as an investor since 2009 and STR operator since 2017.
Why trust CNBC Select?
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every mortgage guide is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of mortgage products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
MONTREAL – The Quebec Professional Association of Real Estate Brokers says Montreal-area home sales rose 9.3 per cent in August compared with the same month last year, with levels slightly higher than the historical average for this time of year.
The association says home sales in the region totalled 2,991 for the month, up from 2,737 in August 2023.
The median price for all housing types was up year-over-year, led by a six per cent increase for the price of a plex at $763,000 last month.
The median price for a single-family home rose 5.2 per cent to $590,000 and the median price for a condominium rose 4.4 per cent to $407,100.
QPAREB market analysis director Charles Brant says the strength of the Montreal resale market contrasts with declines in many other Canadian cities struggling with higher levels of household debt, lower savings and diminishing purchasing power.
Active listings for August jumped 18 per cent compared with a year earlier to 17,200, while new listings rose 1.7 per cent to 4,840.
This report by The Canadian Press was first published Sept. 6, 2024.
In the quest to find cities where renters can enjoy the best of all worlds, a recent study analyzed 24 metrics across three key categories—Housing & Economy, Quality of Life, and Community. The study ranked the 100 largest cities in Canada to determine which ones offer the most to their renters.
Here are the top 10 cities that emerged as the best for renters in 2024:
St. John’s, NL
St. John’s, Newfoundland and Labrador, stand out as the top city for renters in Canada for 2024. Known for its vibrant cultural scene, stunning natural beauty, and welcoming community, St. John’s offers an exceptional quality of life. The city boasts affordable housing, a robust economy, and low unemployment rates, making it an attractive option for those seeking a balanced and enriching living experience. Its rich history, picturesque harbour, and dynamic arts scene further enhance its appeal, ensuring that renters can enjoy both comfort and excitement in this charming coastal city.
Sherbrooke, QC
Sherbrooke, Quebec, emerges as a leading city for renters in Canada for 2024, offering a blend of affordability and quality of life. Nestled in the heart of the Eastern Townships, Sherbrooke is known for its picturesque landscapes, vibrant cultural scene, and strong community spirit. The city provides affordable rental options, low living costs, and a thriving local economy, making it an ideal destination for those seeking both comfort and economic stability. With its rich history, numerous parks, and dynamic arts and education sectors, Sherbrooke presents an inviting environment for renters looking for a well-rounded lifestyle.
Québec City, QC
Québec City, the capital of Quebec, stands out as a premier destination for renters in Canada for 2024. Known for its rich history, stunning architecture, and vibrant cultural heritage, this city offers an exceptional quality of life. Renters benefit from affordable housing, excellent public services, and a robust economy. The city’s charming streets, historic sites, and diverse culinary scene provide a unique living experience. With top-notch education institutions, numerous parks, and a strong sense of community, Québec City is an ideal choice for those seeking a dynamic and fulfilling lifestyle.
Trois-Rivières, QC
Trois-Rivières, nestled between Montreal and Quebec City, emerges as a top choice for renters in Canada. This historic city, known for its picturesque riverside views and rich cultural scene, offers an appealing blend of affordability and quality of life. Renters in Trois-Rivières enjoy reasonable housing costs, a low unemployment rate, and a vibrant community atmosphere. The city’s well-preserved historic sites, bustling arts community, and excellent educational institutions make it an attractive destination for those seeking a balanced and enriching lifestyle.
Saguenay, QC
Saguenay, located in the stunning Saguenay–Lac-Saint-Jean region of Quebec, is a prime destination for renters seeking affordable living amidst breathtaking natural beauty. Known for its picturesque fjords and vibrant cultural scene, Saguenay offers residents a high quality of life with lower housing costs compared to major urban centers. The city boasts a strong sense of community, excellent recreational opportunities, and a growing economy. For those looking to combine affordability with a rich cultural and natural environment, Saguenay stands out as an ideal choice.
Granby, QC
Granby, nestled in the heart of Quebec’s Eastern Townships, offers renters a delightful blend of small-town charm and ample opportunities. Known for its beautiful parks, vibrant cultural scene, and family-friendly environment, Granby provides an exceptional quality of life. The city’s affordable housing market and strong sense of community make it an attractive option for those seeking a peaceful yet dynamic place to live. With its renowned zoo, bustling downtown, and numerous outdoor activities, Granby is a hidden gem that caters to a diverse range of lifestyles.
Fredericton, NB
Fredericton, the capital city of New Brunswick, offers renters a harmonious blend of historical charm and modern amenities. Known for its vibrant arts scene, beautiful riverfront, and welcoming community, Fredericton provides an excellent quality of life. The city boasts affordable housing options, scenic parks, and a strong educational presence with institutions like the University of New Brunswick. Its rich cultural heritage, coupled with a thriving local economy, makes Fredericton an attractive destination for those seeking a balanced and fulfilling lifestyle.
Saint John, NB
Saint John, New Brunswick’s largest city, is a coastal gem known for its stunning waterfront and rich heritage. Nestled on the Bay of Fundy, it offers renters an affordable cost of living with a unique blend of historic architecture and modern conveniences. The city’s vibrant uptown area is bustling with shops, restaurants, and cultural attractions, while its scenic parks and outdoor spaces provide ample opportunities for recreation. Saint John’s strong sense of community and economic growth make it an inviting place for those looking to enjoy both urban and natural beauty.
Saint-Hyacinthe, QC
Saint-Hyacinthe, located in the Montérégie region of Quebec, is a vibrant city known for its strong agricultural roots and innovative spirit. Often referred to as the “Agricultural Technopolis,” it is home to numerous research centers and educational institutions. Renters in Saint-Hyacinthe benefit from a high quality of life with access to excellent local amenities, including parks, cultural events, and a thriving local food scene. The city’s affordable housing and close-knit community atmosphere make it an attractive option for those seeking a balanced and enriching lifestyle.
Lévis, QC
Lévis, located on the southern shore of the St. Lawrence River across from Quebec City, offers a unique blend of historical charm and modern conveniences. Known for its picturesque views and well-preserved heritage sites, Lévis is a city where history meets contemporary living. Residents enjoy a high quality of life with excellent public services, green spaces, and cultural activities. The city’s affordable housing options and strong sense of community make it a desirable place for renters looking for both tranquility and easy access to urban amenities.
This category looked at factors such as average rent, housing costs, rental availability, and unemployment rates. Québec stood out with 10 cities ranking at the top, demonstrating strong economic stability and affordable housing options, which are critical for renters looking for cost-effective living conditions.
Québec again led the pack in this category, with five cities in the top 10. Ontario followed closely with three cities. British Columbia excelled in walkability, with four cities achieving the highest walk scores, while Caledon topped the list for its extensive green spaces. These factors contribute significantly to the overall quality of life, making these cities attractive for renters.
Victoria, BC, emerged as the leader in this category due to its rich array of restaurants, museums, and educational institutions, offering a vibrant community life. St. John’s, NL, and Vancouver, BC, also ranked highly. Québec City, QC, and Lévis, QC, scored the highest in life satisfaction, reflecting a strong sense of community and well-being. Additionally, Saskatoon, SK, and Oshawa, ON, were noted for having residents with lower stress levels.
For a comprehensive view of the rankings and detailed interactive visuals, you can visit the full study by Point2Homes.
While no city can provide a perfect living experience for every renter, the cities highlighted in this study come remarkably close by excelling in key areas such as housing affordability, quality of life, and community engagement. These findings offer valuable insights for renters seeking the best places to live in Canada in 2024.
