A Realtor in Canada is not the same as a real estate agent. REALTORS® are licensed real estate agents who have a membership with The Canadian Real Estate Association (CREA). These professionals are bound by a code of ethics and have exclusive rights to list your property on local MLS systems.
Given how time consuming this process is, hiring the services of a realtor has become essential. A realtor expends all his/her resources to sell a client’s property by marketing it and reaching out to as many prospective buyers as possible. Moreover, the MLS is one of the most powerful real estate selling tools, and exclusive access to it gives realtors an edge over other agents.
Realtors essentially don’t have fixed salaries – they make their money from commissions, which result from sales. The seller’s realtor or listing agent acquires exclusive right to sell a property within a certain time-frame. No matter how the property sells, if it is during that time, the listing agent will be able to charge his commission from the seller. Buyers are generally not liable to pay realtor fees, which are collected by the seller and paid by his/her lawyer after the sale is completed. Generally speaking, realtors charge between 5 to 7% of the selling price as commission, but it is not as simple as it appears.
Fresh realtors, especially those in their first year, find it hard to earn a lot, since they have to learn the system first and gain experience. If you are entering the business for money, you will have to work hard and sweat a bit before you start seeing returns. On the other hand, if you are looking for a glamorous yet challenging profession, in which you don’t have to answer to anyone but yourself, this will be perfect for you.
Moreover, the realtor does not usually get to keep the whole of the commission charged from the seller, since it needs to be split with the buyer’s agent. For instance, if a realtor charges the seller 7% commission for listing a property worth $100,000 – he/she will list it with around 2.5% commission for the buyer’s broker on the MLS. Once the transaction is completed, the seller’s lawyer will pay the realtor $7,000, who will then give $2,500 to the buyer’s agent and keep $4,500. Depending on experience and number of sales, successful realtors can make a lot of money. Some even end up hiring other agents to do most of the work for them.