Top Discount Real Estate Myths




Myth #1: Other REALTORS® will not show discount commission listings.

The real estate market in Toronto is made up of tens of thousands of participants each with their own individual motivations. It's impossible to predict how all will act as a group with certainty, but the truth is that around 3/4 of all One Percent Realty listings are sold by representatives from traditional commission brokerages and here are some of the reasons for this:

"If a brokerage has entered into a representation agreement with a buyer, a broker or a salesperson who acts on behalf of the buyer pursuant to the agreement shall inform the buyer of properties that meet the buyer's criteria without having any regard to the amount of commission or other remuneration, if any, to which the brokerage might be entitled. O. Reg. 580/05, s. 19." - REBBA 2002

This regulation is part of the legislation governing real estate brokerage work, and no REALTOR® would knowingly jeopardize their license to trade by hiding listings from their clients.

Furthermore, REALTORS® are always advised to discuss their fees & services directly with their clients. This is done at the beginning of the representation relationship. Buyer representation agreements have to be reduced to writing, and standard copies of this agreement have a section discussing fees.

Once the REALTOR® has a signed agreement in place, there is no reason to try to keep their client from any specific listings because the buyer has already agreed to pay them a specific commission for their services.

Plus don't forget, buying a new home is an exciting process and few (if any) buyers would leave this task solely up to their representative. Buyers can and will find your home on MLS® (REALTOR.ca), through third party reciprocal websites or a 'FOR SALE' sign, and either ask their REALTOR® to set up a showing or call the listing brokerage directly to view & make an offer on their own.


Myth #2: You will end up paying the co-operating brokerage 2.5%.

Not true. Before your home is listed on MLS® we will sign a listing agreement that clearly sets out the discount commission that's to be paid to the buyer's REALTOR®. My signature on the agreement, means I support this commitment 100% and you will not be asked or required to offer a higher real estate commission at any point.


Myth #3: REALTORS® who charge discount commissions, work only part-time.

Wrong. Whether a REALTOR® works full-time or part-time has nothing to do with the amount of commission they get. The truth is that on average a discount real estate commission agent gets more listings and does more deals then an average traditional commission agent. They have no choice but to work full time. It's less of a stretch to assume that a traditional commission agent would be working part time since his or her income per deal is higher thus reducing the need to work more.


Myth #4: You get what you pay for.

You may hear someone say that "you get what you pay for with discount commission agents". Insinuating that hard to quantify services, such as the agent's availability, or their deal-experience, will be lacking and will lead to diminished results.

Nothing could be further from the truth. Here is part of an actual testimonial from one of my recent clients:

"When I set my mind to something it comes to be and usually pretty fast. I knew what I wanted for the sale of my condo and for the purchase of my next home. I used Arthur for both and he was easily able to keep up and rearrange his schedule when I needed to do something 'now'. " ...
"You know you have a good REALTOR® when a Broker of Record (who listed the house I bought) tells you that Arthur was exceptional at presenting the purchase offer, had 'done his homework' and that I had a chosen a good REALTOR®. This was extremely important as we ended up in a multiple offer situation and we won. " - Trish

The truth is that because of the incredible price appreciation of real estate in Canada recently, real estate commissions have increased at an equal pace. This while the amount of work involved has decreased, and the number of competing REALTORS® has increased.

These economic realities have opened the door for brokerages to provide the same services, at discounted prices.

I provide all real estate services including the hard to quantify ones, and you should expect nothing less. Because while 1% + $900 ($6,900 Minimum) is significantly lower than what other agents charge, it is still a big chunk of money and more than enough to pay for top quality real estate representation.


Myth #5: Paying a discount real estate commission will result in a lower sale price.

Not true. There are many factors which can affect the price. Those can be seasonal, economic, or weather related just to name a few. The motivations of the seller and buyer matter as well. However the commission you pay has an insignificant impact on the price.

When a Buyer finds their dream home they do not ask "how much commission is being paid here?". They are concerned with things like the number of bedrooms, location, local schools, and the price. If a home is priced competitively, it will sell at fair market value regardless of the commission offered.


Myth #6: There will not be enough money for all the marketing materials.

Because of the popularity of the Internet marketing your home has never been more affordable. The Canadian Real Estate Association provides the Data Distribution Facility (DDF) for use to its REALTORS®. The DDF is responsible for the distribution of listing information to hundreds of portal type websites such as realtor.ca, zoocasa, homefinder, and many brokerage & personal websites.

The DDF has recently been responsible for over 3000 online visitors in just 9 days on a popular listing in Leslieville, and resulted in over 100 REALTOR® showings during that time. Here is what the seller had to say:

"Many other REALTORS® had said we could not possibly get maximum exposure of our property without paying at least another 2.5% commission to reach all the potential buyers. Well I am happy to say that the fact that we had over 110 showings from other REALTORS®, 2 day open house where many other visitors came that in all resulted in 11 confirmed offers, speaks for itself and the great job Arthur did for us." - Ron and Doug

Plus keep in mind, from the discount commission you will pay on closing, only $400 will go towards the office, and the remainder is used directly to help sell your home. Unlike with most traditional commission brokerages where thousands of dollars can go to the office to pay staff and shareholders based on a percentage agreement.

You may be paying less, but you're getting more for your money.


Myth #7: You will be left to deal with the listing on your own during a critical time.

The services provided are full MLS® services, and the intent is to be available every day while we have an active listing agreement signed.

In the case of an accident or unforseen circumstances, you will receive direct assistance from the office's experienced broker of record or one of its many REALTORS®.