How Commission Is Allocated … and What It Covers

Real Estate professionals are independent business people who must pay fees to their broker, to their boards, and must cover ALL of their business expenses before they acquire net earnings. This means ALL expenses they incur to market your home, whether it be newspaper advertising, preparing and printing of feature sheets, the sign on your front lawn, the cost of the lockbox, time spent hosting an open house, time spend showing your home to perspective buyers, pre-approving perspective buyers, etc. etc. etc.

Most professionals receive an hourly fee for services as the work is done, but real estate agents are paid ONLY when have successfully completed a transaction.

All work leading up to that point, which might include consulting, fee appraisal evaluations, listing, marketing, showing properties, advertising, prospecting, etc. remains unpaid, until two parties are successfully brought together in a real estate transaction.

How Is It Allocated?

The commission paid to the Listing Broker upon completion of the sale is allocated as follows:

•-        50% is paid to the selling broker. The salesperson gets a portion of that dollar amount, dependent on what level of “split” they have negotiated in their contract. Each agent is under contract and the split, varies with the amount of commission earned.

•-        50% is paid to the listing broker, and again, the salesperson who represented the Seller receives his/her portion, depending on the terms of their contract as to whath percentage they receive. The amount will be dependent on what “split” they are currently on with their respective broker.  Again, this amount varies with the amount of commission earned.

What Does Commission Pay For?

1.    Licence Fees     The Ontario Real Estate Association decrees that a realtor must be licenced to sell real estate under their jurisdiction and by-laws.

2.    Board Fees        Toronto Real Estate Board, and Mississauga Real Estate Board and any other Real Estate Board the agent is a member of.

3.    Broker Fees       We are under contract to our broker for holding our licence and being the broker under whom I can trade in real estate.

4.   Advertising        All advertising, which includes newspapers, flyers, newsletters, mail-outs, web sites, feature sheets, personalized booklets, etc. are all expenses the  real estate agent is responsible for.

5.    Office Fees        A fee is paid to the broker to whom we under contract for use of such items as:  office space, computer equipment, software, fax machines,  photocopiers, phones, pagers, stationery, secretarial services, listing sign, open house signs, business cards, and automobile.

6.    Continuing Education           Agents are responsible for all educational courses and real estate seminars.

7.    Insurance:        Because we are independent business professionals, we are  responsible for our own medical/dental insurance and personal liability insurance.

In addition to the expenses noted above, you also get the benefit of an experienced realtor.

Just how much is that worth to you when you are negotiating one of the largest financial investments you have?

1.  Education and Experience

It is true in these busy times and with our busy lives, we are all looking for more of that precious commodity … which seems to be becoming more and more precious. Hiring the professionals gives us that time. You don’t need to know about buying and selling real estate if you hire a real estate professional who does, and will relieve the stress. Henry Ford once said that when you hire people who are more knowledgeable that you are, it proves you are smarter than they are.

3. Agents act as Buffers

If you are selling your home, a real estate professional can pre-qualify a buyer before showing them your home, so only qualified buyers are viewing your home. If you are buying a home, the real estate professional who is a member of the real estate board, has access to all up to date listings of homes on the MLS service and can quickly narrow down properties to show you that meet your specific requirements.

3. Knowledge of the Neighbourhood

Real Estate agents have access to a diverse data bank of knowledge pertaining to any specific neighbourhood, i.e. schools, shopping, transportation, places of worship, and other demographics. They either possess that knowledge from working in the area, or know where to find it for you.. They can identify comparable sales and provide these facts to you prior to submitting an offer to ensure you are paying fair market value, and not paying more than you should for a home.

4. Guidance with Pricing

Contrary to the beliefs of some, it is not the agent who sets pricing for sellers or buyers, it is the current market conditions that dictates pricing. An agent can, however, provide information to the Seller to use as a benchmark or guideline to assist them in selecting a price range to offer their home for sale, based on similar homes in their neighbourhood that sold recently. In addition to location, the condition of the home plays a major factor in obtaining the highest sale amount.  An updated home will naturally sell for more than one that has not been updated.

5. Market Conditions

Real Estate Agents have access to current market conditions and activities which they can share with you, which will govern your selling or buying process, i.e. median or average sales price, how many days on the market; ratio of list to sold price, are just a few. All these things will assist you in moving forward with the information you need to make an informed decision. Market conditions are ever-changing, and most often are determined on the time of year you list your home for Sale.  Generally the market is a little quieter than normal around Christmas for example, or during the months of July and August. There are many factors involved to determine how you should proceed and a trained real estate professional can help guide you through this process.

6. Professional Networking

Real Estate Agents network with many other professional who can provide you with services you will need to buy or sell your home, such as a qualified, certified home inspector, a mortgage agent, or a real estate lawyer. Real Estate agents can provide you with a list of these professionals who have a reputation for efficiency, competency and competitive pricing and you can then choose which professional you want to hire.

7. Confidentiality and Negotiating Skills

Real Estate Agents negotiate well because unlike most buyers and sellers, real estate agents can remove themselves from the emotional aspect of the transaction, remain objective and professional, and because they are skilled at what they do. Its part of their job. Real Estate agents are not messengers delivering buyer’s offers to sellers or vice versa, they are professionals who are trained to present their client’s case in the best possible light, while maintaining complete confidentiality from competing interests.

8. Processing Paperwork

A few years ago, real estate transactions required little paperwork, a one page deposit receipt were the norm. In today’s world Agreements of Purchase and Sale Agreements can often run 5, 6 or 7 pages, depending on the number of clauses or conditions contained in the Agreement. In addition to the Agreement itself, there may also be waivers to remove conditions, and sometimes Amendments to the Agreement. In an effort to try to combat money laundering, the Federal Government implemented a mandatory statute in June, 2008 making it mandatory for each agent to see a form of photo identification from each client, and record this information on an Individual Identification form which is retained in the file. Along with the Identification form a Receipt of Fund document is completed to record when the deposit was received and in what form, i.e. bank draft, certified cheque, etc. One of these forms completed incorrectly as one oversight could result in the negation of a transaction or cause legal difficulties, and possible a law suit.

9. Education and Experience

In most scenarios, closings run very smoothly, but for those cases where problems arise, your Real Estate Agent is there to assist you, or point you in the right direction to get matters resolved. Sometimes questions arise after closing, and an honest, Real Estate Agent will be there for you to answer any questions you may have that were overlooked in the excitement of closing, and moving.

10. Develop Relationship for Future Business

Providing a high level of service to clients gives real estate agents incentive to ensure their clients are happy and satisfied. This often leads to referrals, which is the livelihood for many agents, and few would survive if they were solely dependent on merely drumming up new business. It also means that an agent who stays in the business will be there for you when you need to hire an agent in the future to handle your next real estate transaction.

All of these factors add up to good value for service when leaving a major investment like your home, in the hands of a professional..

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I live and work in STREETSVILLE and have a vested interest in property values here. Are you considering buying or selling or know anyone who is? Give me a call for a complimentary evaluation of your home in this changing market. (416) 717-6331.

When you choose me to handle your real estate needs, you are choosing a real estate professional who cares about you and your family, and who will listen to your needs, work together with you, and protecting your interests to achieve your objectives.

www.streetsvillerealestateagent.com            gvalvasori@rogers.com

Your STREETSVILLE Real Estate Agent

Experience, Service and Integrity in Every Real Estate Transaction

I am the proud recipient of the Quality Service Certified Platinum award for outstanding service to my clients - a rating of 100%

Reblogged from streetsvillerealestatebuzz:

Does your home have that WOW factor??

Are you maximizing your options to improve the salability of your home?

Home Staging

Staging your home is one of the smartest decisions a seller can make.  Home Staging can turn a cold and lifeless looking property into a warm, inviting home in a potential buyer’s mind. First impressions are everything and if your property is presented in the right way, it will enchant your visitors and make it irresistible.

Home staging is the process of de-personalizing a home and making it “buyer ready” so it appeals to the largest potential buyer audience possible using proven design techniques that highlight the home’s best architectural features.

Home Stating, also known as real estate staging, is not home decorating, but rather an art that utilizes a home owner‘s existing furniture, lighting, and art work to draw a potential buyer’s eye to the positive aspects of your home.  Home staging will address furniture layouts, paint schemes, clutter, traffic flows, focal points, lighting, accent colour, and creating that WOW factor.

Some sellers are reluctant to spend the money on home staging, but that is usually shortsighted as the cost of staging your home is minimal compared to the rewards it will produce.  Study after study has shown that staged homes usually sell much faster, and for a higher selling price.

The most buyer traffic will come through a home the first two weeks it is on the market.  No one gets a second chance to make a great first impression, therefore when a potential buyers steps through your front door, it is critical they have a positive reaction, as that first impression is what they will take with them when they walk back out the door, and remember. With buyers expecting move-in ready homes and becoming more aware of what to expect in a home, more sellers are turning to home staging to help them differentiate their home from the competition.

THE POTENTIAL BENEFITS OF HOME STAGING FOR THE SELLER:

• Sellers who stage their properties first, also end up packing most of their belongings before the home goes on the market; this makes the move less stressful.
• All the clutter is removed from your home prior to your first Open House.
• The statistics show your home will sell faster because it will show better.

THE POTENTIAL BENEFITS OF HOME STAGING FOR THE BUYER:

• The buyers can see the architectural features of the home they want to buy rather than wading through clutter and family pictures.
• Potential buyers are able to envision their belongings fitting in the space because all excess furniture and clutter has been removed.
• A property that has been professionally staged has optimal room layouts, which shows all potential buyers the best way to utilize the space in every room.

**************************************

I live and work in STREETSVILLE and have a vested interest in property values here. Are you considering buying or selling or know anyone who is? Give me a call for a complimentary evaluation of your home in this changing market. (416) 717-6331.

When you choose me to handle your real estate needs, you are choosing a real estate professional who cares about you and your family, and who will listen to your needs, work together with you, and protecting your interests to achieve your objectives.

www.streetsvillerealestateagent.com            gvalvasori@rogers.com

Your STREETSVILLE Real Estate Agent

Experience, Service and Integrity in Every Real Estate Transaction

I am the proud recipient of the Quality Service Certified Platinum award for outstanding service to my clients - a rating of 100%

That along with the low-interest rates, give a slight advantage to Sellers right now.. too many Buyers.. not enough listings.  Great situation for Sellers but if you are a not selling a property and are a first time home buyer, you must be very mindful not to overpay when submitting an offer on a home you are contemplating. If you do, and your circumstances change a year down the road, and you find yourself in a position where you have to sell, you may not recuperate your investment, and you may in fact lose money, as the real estate market fluctuates.

I have had many buyers who refuse to even participate when there are competing offers, but they could be missing out on an opportunity to buy the home they love.  Just because there are multiple offers doesn’t mean you have to over-spend… I counsel my Buyers to put forth their best offer that falls within their budget and comfort level.  Since the other offers remain confidential, everyone is on an even playing field.. so no one knows any of the details contained in the competing offers.

If you find yourself in that situation, try to submit the cleanest offer possible, and by  “clean” I mean an offer with the least amount of Conditions possible.  If you have already been pre-approved and your numbers are secure, you may consider removing the financing condition to make your offer more appealing to the Seller. Speak to your bank or mortgage broker to ensure your mortgage is approved and you have a Letter of Commitment prior to removing any financing conditions.

Try to make your offer as appealing as you can to the Seller… give them the closing date they are asking for if you can.  Let them know you are serious by submitting a substantial deposit with the offer.  Stay within the boundaries of inclusions and exclusions listed on the MLS Listing.

Normally I would always recommend a house inspection in every instance, but if the property is relatively new, say 10 years and under, and you go through the home to see its general condition, and it looks like its been well cared for, you could also consider removing this Condition, but again that is the Buyer’s sole discretion.  You could be in for surprises after closing so make sure you are comfortable doing this.

When buying a Condominium or Condominium townhouse one Condition that is must is for your lawyer to review the Status Certificate.  This document has a wealth of information in it, i.e. the amount in the reserve fund, when the maintenance fees will elevate, are there any special assessments being levied in the near future, are there any lawsuits pending against the corporation, is insurance on the exterior of the buildings and common elements sufficient… These are all important things your lawyer will review for you.

In summary, if you find there is another offer in addition to yours… submit your very best offer the first time, as you may not get a second chance.  Stay within your budget and what you can comfortably afford… you just never know.. your offer could be the one that is ultimately accepted!

Have you ever considered buying a log home?  Like most home purchases, it is a very important financial decision, but along with that, it could also be a very important environmental decision. There has been a surge in interest in building “green” because they are environmentally friendly and healthier, and more cost efficient to operate.

Log homes are unique in design and appearance and among the most beautiful homes you will find.  The curb appeal of well designed and constructed log home can increase the value and grow your investment, and some people are willing to pay a premium to purchase one.

Many people have traced their desire to live in a log home to a feeling of comfort and well-being… perhaps to an early childhood memory of spending days at the cottage, or a more recent experience of visiting someone who lives in a log home and has experienced their charm, warmth and ambiance. It is difficult to match the beauty, comfort and security of a log home.  It is an escape to peace and serenity that nature provides us and enables us to relax and appreciate what surrounds us. A truly well-built log home offers a blend of executive amenities with charm, warmth and character.

A log home is one that will never go out of style because of its special quality and people enjoy in living in one because it is built from natural materials.  The wood brings a sense of security, and serenity and certainly an obvious choice for those who appreciate nature and a home that fits naturally into the surroundings. Log homes are a unique in style and living experience and have a very pleasing ambiance.  Generally, people who have created an ideal place to live in have done so because it is where they want to remain for a long time.

The National Association of Home Builders, report that green built homes now account for more than 10% of new construction and 33% of new home builders expect to be involved in green building to some degree.  In addition to being the only major building material that’s renewable and sustainable over the long-term, it is superior to steel and cement in almost every environmental impact category.

Log homes are extremely durable, and stand up exceptionally well to the elements.  Log buildings are some of the oldest structures, still occupied in North America and modern technologies have made them even more durable and long-lasting.

Even though log homes are typically custom-built homes, they compromise one of the fastest growing segments of the real estate market..  and because of supply and demand, are highly likely to appreciate in value. In addition to their popularity, they have superior craftsmanship which also contributes to their higher resale value.

A typical home uses processed lumber in its construction, but log homes are constructed of natural and renewable materials that are inherently environmentally friendly and durable. Traditionally built homes with their hollow walls, make it difficult to detect problems such as insects, or mould.  That problem does not exist in a log home, as you can check the logs around the perimeter of your home by simply walking around and checking the condition of the logs.

Log homes are extremely energy-efficient homes because of their solid wood construction.  They keep heat it during the winter months, and during the summer month keep heat out. Because of they are constructed of solid logs, they make an efficient sound barrier from the exterior, and also from the inside, from room to room. Wood breathes and absorbs water vapour during humid conditions and releases it in dry conditions. They even filter our pollutants.

Heating and cooling a log home can be up to 15% more energy-efficient than the same system in a similar traditional wood frame home.  Adding thermal efficient windows will also add to their efficiency.  Logs should be a minimum of 6’-8” thick for maximum efficiency.

You may find this hard to believe, but log home are more fire resistant than traditional wood frame homes and are less likely to experience major fire damage. Because logs are solid in construction and have no air pockets, they burn slowly and smoulder similar to logs burning in a fireplace, and because logs have no hollow space they do not allow flames to spread quickly through the wall and burn large areas, and usually create only a surface burn.  Of course, wood is not fireproof, but a log home will burn at a much slower rate than a traditional wood frame home, and will buy extra time to control the fire and move to safety.

Is a log home in your future?

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I live and work in STREETSVILLE and have a vested interest in property values here. Are you considering buying or selling or know anyone who is? Give me a call for a complimentary evaluation of your home in this changing market. (416) 717-6331.

When you choose me to handle your real estate needs, you are choosing a real estate professional who cares about you and your family, and who will listen to your needs, work together with you, and protecting your interests to achieve your objectives.

  www.gloriavalvasori.com             gvalvasori@rogers.com

Your STREETSVILLE Real Estate Agent

Experience, Service and Integrity in Every Real Estate Transaction

Reblogged from streetsvillerealestatebuzz:

There are a great deal of phrases and terminologies unique to real estate.  Listed below are just a sample of the common terms you will encounter in the process of buying or selling a home.  Take a moment to familiarize yourself with them so you will know where to look if you need a definition.

Amortization Period       The actual number of years it will take to pay back your mortgage loan.

Appraised Value               An estimate of the value of the property. Conducted for the purpose of  mortgage lending by a certified appraiser. This appraisal is not to be confused with a building inspection.

Assumability                      Allows the buyer to take over the seller’s mortgage on the property.

Chattels                                Personal property which is tangible and moveable, such as electrical appliances, blinds, etc.

Closed Mortgage               A mortgage that locks you into a specific payment schedule. A penalty usually applies if you repay the loan in full before the end of a closed term.

Condominium Fee            A common payment among owners which is allocated to pay expenses.

Conventional Mortgage  A mortgage loan issued for up to 75% of the property’s appraised value or purchase price, whichever is less.

Deed                                       An instrument in writing, duly executed and delivered, that conveys title or interest in real property.

Down Payment                 The buyer’s cash payment toward the property. The difference between the purchase price and the amount of the mortgage loan.

 Encumbrance                  Outstanding claim or lien recorded against property or any legal right to the use of the property by another person who is not the owner.

Equity                                 The difference between the home’s selling value and the debts against it.

Fiduciary Duties           The duties required by an agent (the brokerage firm and its representatives) acting for the principle in an agency relationship.  They include loyalty, disclosure, confidentiality, diligence, accounting and obedience.

High Ratio Mtge.            A mortgage that exceeds 75% of the home appraised value. These mortgages must be insured for payment.

Interest Rate                  The value charged by the lender for the use of the lender’s money. Expressed as a percentage.

Irrevocable                     Incapable of being recalled or revoked.  Unchangeable, unalterable.

Land Transfer               A fee paid to the municipal and/or provincial government

Deed Tax                         An instrument in wirting duly executed and delivered for the transferring of property from seller to buyer.

Maturity Date               The end the term, at which time you can pay off the mortgage or renew it.

Mortgagee                      The person or the financial institution that lends the money.

Mortgage Insurance  Applies to high-ratio mortgages. It protects the lender against loss if the borrower is unable to repay the mortgage.

Mtge. Life Insurance Pays off the mortgage if the borrower dies.

Mortgagor                      The borrower.

Open Mortgage            Allows partial or full payment of the principal at any time, without penalty.

Portability                    A mortgage option that enables borrowers to take their current mortgage with them to another property, without penalty.

Preapproved Mtge.    Qualifies you for a mortgage before you start shopping. You know exactly how much you can spend and are free to make a “firm” offer when you find the right home.

Prepayment Privileges Voluntary payments in addition toregularmortgage payments.

Principal                          The amount borrowed or still owing on a mortgage loan. Interest is paid on the principal amount.

Refinancing                     Paying off the existing mortgage and arranging a new one or re-negotiating the terms and conditions of an existing mortgage.

Renewal                            Re-negotiation of a mortgage loan at the end of a term for a new term.

2^nd Mortgage                  Additional financing. Usually has a shorter term and higher interest rate than the first mortgage.

Survey                              The accurate mathematical measurement of land and buildings thereon, made with the aid of instruments.

Term                                 The length of time the interest rate is fixed. It also indicates when the principal balance becomes due and payable to the lender.

Title                                  Legal ownership in a property.

Variable Mtge.              A mortgage with fixed payments, but fluctuates with interest  rates. The changing interest rate determines how much of the payment goes towards the principal.

Vendor Take Back Mortgage    When the seller provides some or all of the mortgage financing in order to sell their property.

**************************************

I live and work in STREETSVILLE and have a vested interest in property values here. Are you considering buying or selling or know anyone who is? Give me a call for a complimentary evaluation of your home in this changing market. (416) 717-6331

www.streeetsvillerealestateagent.com         gvalvasori@rogers.com

Your STREETSVILLE Real Estate Agent

Experience, Service and Integrity in Every Real Estate Transaction

Reblogged from streetsvillerealestatebuzz:

Reblogged from streetsvillerealestatebuzz:

Reblogged from streetsvillerealestatebuzz:

• 

I have been a real estate agent for 26 years, and one of the things I always suggest to my clients is for them to contact their financial institution or a mortgage broker and get their financing pre-approval in place prior to going out house hunting.  There is nothing worse that a couple finding their dream home, only to find out it is out of their price range and they can't afford to buy it. 

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