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Consumer Guide to Referrals

Consumer Guide to Referrals

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This FAQ explains how referrals work, who can pay them and what disclosures must be made by an agent when they receive or pay a referral.

What is the standard rate that real estate professionals charge for listing my home?

There is no standard rate of commission that is charged by all real estate brokerages and real estate professionals. You, as a consumer, have a right to negotiate any commission structure that best suits you. That being said, it is important to note that a real estate professional or brokerage does not have to accept your suggested commission rate, just as you do not have to accept theirs. In some cases, you may not be able to come to an agreement on commission rates and you may want to seek the services of a different real estate professional or brokerage.

If I refer a friend to a real estate professional, can that real estate professional pay me a referral fee?

In most cases, the answer is yes. If you are referring a friend or family member to a real estate professional, you can receive a referral fee from that real estate professional or brokerage. There are a few restrictions, however:

  • If you do anything that requires a licence to make the referral, such as soliciting people who are looking for homes or looking to sell homes in order to make the referral, you cannot get paid.
  • If making referrals is a business model you have set up, you cannot get paid because it is considered solicitation which requires you to be licensed under RESA.

I want to sell my home for $500,000. Instead of paying my real estate professional a percentage of the sale, can we agree that he or she can collect any amount over $500,000?

No. When a commission is negotiated between you and your real estate professional it cannot be for the difference between the list price and the actual price it sells for. You are able, however, to negotiate a flat rate commission in dollar form instead of a percentage, if that is what works best for you and your real estate professional.

Does my real estate professional have to tell me how much he/she is getting paid from the seller or from other contractors they refer me to?

Yes. The amount of money your real estate professional earns or receives is information that must be disclosed to you in writing. This includes any referral fees they collect from home inspectors or other contractors they may suggest to you, regardless of whether they are providing sales services, strata management services, or rental property management services.

If I am buying a home and the seller is licensed as a real estate professional, do they have to tell me if they earning a commission from representing themselves?

Yes. When a real estate professional disposes of, or acquires real estate on their own behalf (or they represent a specific group of people such as some family members or companies they may be part owners of), a form call a Disclosure of Interest in Trade will be presenting to you disclosing that the seller is licensed and will include any remuneration they may be earning.