The rules for real estate fees have changed: what home buyers and sellers need to know – Dec. 2013
The Government of Ontario has changed the rules to give consumers and real estate brokerages more options and flexibility regarding how real estate services are paid for.
What has changed
Previously, real estate brokerages could charge consumers a flat fee or a percentage of the sale price, but not a combination of the two. The restriction has been removed, so brokerages now have the option to make fee arrangements that could include a blend of a flat fee and a percentage of the sale price.
These changes, brought in by the Stronger Protection for Ontario Consumers Act, 2013, are effective as of December 12, 2013.
What it means
With greater flexibility in how to charge for their services, real estate brokerages now have more options to differentiate their business from their competitors. How this will play out in the marketplace remains to be seen, but the bottom line is that competition and market forces can now play a greater role in how real estate service fees are structured.
While choice and flexibility are good for consumers, it remains crucial for home buyers and sellers to educate themselves, and to understand what services their brokerage will provide and how they are priced.
Home buyers and sellers have a wealth of choices when they choose a real estate professional. They should consider their options and ensure the person they choose will provide the services they’ll need with a price structure they can work with. Fees and commissions vary based on the services provided, and communicating clearly ahead of time and getting everything in writing can help avoid problems later on.