New Rules for Real Estate Fees
Sharing this bulletin with you seems like a good way to end the new year. I’ll be back soon with a year end review of the market and of course, some predictions for what lies ahead. Until then, Happy New Year everyone.
Public Advisory Published by the Real Estate Council of Ontario
The rules for real estate fees have changed: what home buyers and sellers need to know
December 13, 2013 (TORONTO) – 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. Prices and service levels are negotiable, and communicating clearly ahead of time and getting everything in writing can help avoid problems later on.
RECO regulates the real estate profession in Ontario. RECO is responsible for administering the Real Estate and Business Brokers Act, 2002 (REBBA 2002) and associated regulations on behalf of the provincial government. In order to trade in real estate in Ontario, brokers and salespersons must be registered under REBBA 2002. RECO’s mission is excellence in the delivery of regulatory services that protect the public interest and enhance consumer confidence in the real estate profession. For more information, visit www.reco.on.ca.