Agents facing ‘toughest’ fight to protect commissions

by Jordan Maxwell10 Aug 2015
Agents are having to fine tune their skills for negotiation as sellers get more fiscally conscious about the amount of commissions they’re paying out with a hot housing market.

“Because it’s a sellers’ market and things tend to slow down in the summer, there are a lot of agents out there just taking what they can get and it’s bad news for the industry,” Domenic Spina, a real estate agent with Royal LePage, told REP. “There are a lot of agents out there taking one per cent commissions when the standard is five per cent, which just helps to diminish the work we do as a whole.”

His comments are indicative of a growing concern among some agents who feel their commissions are being undercut by sellers and by agents who agree to take lower commissions, which Spina believes is undervaluing agents and their services on an industry-wide scale.

They're also backed by Jamie Winkler, a real estate agent in Chatham, who said that commission-free sites as well as the Competition Act has created challenges for agents as they're forced to step up their level of services, advertising and social media activity to prove value and worth.

One thing becoming important for agents is power of negotiation especially in markets such as Toronto and Vancouver, where sellers are looking to take advantage of strong buying demand.

According to a recent study from, proving your worth and marketing are common themes, but there is one clear tip agents can learn when negotiating with clients who play hardball: Never limit yourself to one negotiation issue.

The concept is for both the client and the agent to win, rather than creating a winner vs. loser situation. Most likely, you, the agent, will lose most of the time if you don’t temper a buyer’s expectations.

“The success of this negotiating tactic is to allow the buyer to get one or two of his requests through. If the buyer feels they are not moving forward in any way, this tactic will truly sabotage the deal,” the Inman study reads.

“However, done correctly, the buyer will feel as though someone is on his or her side, that he or she is making progress, and giving up will not be an option when they have come so far.”


  • by Old Timer 8/10/2015 1:46:18 PM

    I didn't really get any 'solution' advice from this column.......When houses are selling within a week or two of listing date it is hard to justify
    the 'normal' commission generally charged by Realtors. The Sellers have a point! In many cases the Realtor doesn't have to spend a dime on advertising, etc. only their time to prepare the listing and take a few pictures. When this happens, it is difficult to 'prove your worth' as a Realtor. The Seller looks at the selling time frame and probably thinks he could have gone FSBO and sold just as fast with minus the big commission. We know that a Realtor who has been in the business for years has lasted the 'slow' markets where it took months to sell a listing and meant hours of work and often advertising and etc. expenses. So when a 'brisk' market is going on, this same Realtor's expenses
    go down and the commissions earned even out or 'balance' the good and the bad times in this business. Having said this, sadly, the Seller in a good market doesn't want to take this into consideration. It is all about dollars and cents to the Seller. The only action that will satisfy
    such a person who makes this complaint is: lower your commission in proportion to the time it takes to sell and the amount of work and money spent to bring about a sale.

  • by Christine Crockett 8/10/2015 4:22:28 PM

    As a seasoned realtor, most of my work is accomplished "weeks prior" to going live on the mls and behind the scenes. So, although the house might sell in a matter of days, many might perceive my value as being insignificant from an outside perspective alongside such a strong market. That being said, I can honestly say that many of my client's extraordinary success stories have hinged on the extra mile we took in today's market. I can understand the public's perception as stated but many houses are "not" selling quickly. As a prudent consumer, it's always wise to do extra research on whom you hire for such an important investment regardless of the market.

  • by Sheldon Zacharias 8/10/2015 5:59:54 PM

    Excellent point Christine Crockett! Often we will sell one of our own listings in a relatively quick looks like quick and easy to the public. But in fact, we may have worked with the buyer for 6 months prior to that and put in many hours to develop that buyer for that property. One of the reasons our sellers list with us, is the fact we work our area and may have potential buyers. That in it self is worth a premium. Christine also points out that much of the value of a great agent occurs way before the listing hits MLS and the sign goes up!!

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