How To Avoid Realtor Commissions in Ontario by Selling Your Own Home

Realtor commission in Ontario is usually 5% of a property’s final selling price. Half of that--2.5%--goes to the seller’s realtor and the other half goes to the buyer’s realtor.


Five percent of the final sale price often means a hefty commission fee. For example, the average selling price of a home in the GTA was just over $800,000 in 2019. A 5% commission on an $800,000 home equals $40,000. Commission fees are easily the highest cost associated with selling a home.

You can avoid paying some–or all–of those commissions fees in Ontario by selling your own home. (Note: If your buyer chooses to use Realtor commission in Ontario is usually 5% of a property’s final selling price. Half of that–2.5%–goes to the seller’s realtor and the other half goes to the buyer’s realtor. an agent, you will still need to pay commission to that realtor. However, you will save the sum that would have been charged by your own agent.)

What Does a Real Estate Agent Do?

With their training and experience, it’s irrefutable that realtors bring a wealth of knowledge to the table. Without that training and experience, the most important things a private seller needs is time and a willingness to learn.

In order to list and sell your own home, you will need to do a realtor’s tasks, including:

  • Calculating the fair market value of your home and using that figure to determine your home’s list price.
  • Showcasing your home in its best possible light, which includes doing repairs, minor upgrades, deep cleaning, and staging.
  • Developing and following through with a marketing plan.
  • Showing your home to potential buyers.

It’s perfectly feasible for most private sellers to do these projects on their own, which will lead to substantial savings in terms of commission fees.

Who Can Help You Sell Your Home Besides a Realtor?

While you can max out your savings by doing all the work yourself, you might consider bringing other professionals on board–for relatively small fees–to help with the selling process.

Licensed Appraisers

When you work with a real estate agent, that realtor will determine your home’s fair market value and listing price. You can choose to do the research involved in calculating those figures yourself or you can hire a licensed appraiser for a very reasonable fee. In Ontario, the fee for a professional home appraisal is about $350 to $500 plus HST.

Home Inspectors

Having a home inspection done by an accredited member of the Canadian Association of Home and Property Inspectors (CAHPI) adds credibility to you as a seller and supports your asking price. Many buyers will ask for a home inspection before they will close on an offer. A professional home inspection costs about $300 to $500 plus HST in Ontario.

Home Stagers

A real estate agent usually provides advice on how to best showcase your home for potential buyers. If you’re not working with a realtor, you can certainly stage your own home. But you might also consider hiring a professional home stager. These professionals have the training and know-how to make your home look beautiful and appealing to prospective buyers. They also have access to an array of home accessories that they can bring in to make your home pop. It costs about $250 plus HST for an initial consultation with a home stager in Ontario; there are additional rental fees if they bring in materials to stage your home with.

Mere Posting Realtors for MLS Listings

The most effective marketing tool for real estate is the Multiple Listing Service (MLS). Only licensed realtors can list properties on the MLS. However, private sellers can hire a realtor for a “Flat Fee Listing” or “Mere Posting.” For a fee as low as $99 in Ontario, a realtor will work with you to simply to list your home on the MLS.

Real Estate Lawyers

While you may consider whether to hire any of the above professionals, a private home seller must hire a reputable real estate lawyer. Selling a home involves a complex legal contract which should always be handled by a professional.

What Does a Private Seller Need to Do to List a Home?

Once you’ve determined which tasks you will hire other people to do, it’s time to roll up your sleeves and do those jobs that are left on your list. While it might require a significant chunk of time to sell your own home, it’s worth it to save the commission fees that are charged by realtors in Ontario.

Determining Fair Market Value and List Price

If you’ve decided to forgo the cost of hiring a licensed appraiser, your first step is calculating your home’s Fair Market Value (FMV).

There are many factors that go into determining a property’s FMV, including:

1. Location (municipality, neighbourhood, and nearby properties and amenities).

2. Property characteristics (lot size, outbuildings, square footage, number of rooms, etc.).

3. The sale price of 3-10 comparable properties that sold within the last six months.

4. Municipal valuations/property tax assessments to help determine market trends.

It’s important to be objective when calculating your home’s FMV. If you want to make sure you have the correct ballpark figure, you can use an online home value calculator to double check. These free online tools, often offered by real estate companies, aren’t terribly accurate. The figures they provide shouldn’t be taken as a final valuation. However, they may be helpful in determining if your own calculations are objective and reliable.

Once you’ve determined the FMV, you will be able to settle on a listing price within that range.

Showcasing your Home

A fresh, beautiful, and decluttered home will be attractive to potential buyers and will help your house sell more quickly. A real estate agent will usually offer advice on how to highlight your home’s best features. If you’re selling your own home to avoid the realtor commission, you can either hire a professional home stager or you can do these things on your own:

1. Repairs and minor upgrades can make your home more appealing. Do things like replacing cracked light switch covers, repainting chipped areas, and updating light fixtures and cabinet hardware.

2. Purging and decluttering can make your home look bigger. As well, too many personal items can make it difficult for prospective buyers to imagine living there.

3. Don’t just clean–deep clean. Break out an old toothbrush to get every nook, cranny, and window groove spotless. Dust light fixtures. Wash or otherwise clean window coverings. Polish windows until they sparkle. Make your whole house shine.

4. Stage your home so that it looks appealing and welcoming to strangers. Study your home’s interior with a critical eye. Would moving the furniture create a better pathway? Would a pop of colour warm up a room? Would a throw tossed over a chair make someone yearn to curl up and sit for a while? Where would fresh flowers have the most impact?

When you’re working to make your home look attractive to potential buyers, keep those buyers in mind. We all have our personal quirks and preferences but it’s important to be objective. Keeping things simple and neutral is the best way to make your home more widely attractive.

Marketing Your Home

A crucial task of a real estate agent is marketing. A home won’t sell if no one knows that it’s for sale. Realtors use the MLS, as well as other tools, such as online and social media listings for marketing. But if you’re selling your own home to avoid paying real estate commission fees, then marketing is one more task to add to your own list.

Photographs

Start the marketing process by taking photos of the interior and exterior of your home. It’s important to take crisp, well-framed photos. Try these tips for the best results:

  • Use an actual camera (and not a phone);
  • Use a tripod or otherwise stabilize your camera;
  • Take landscape photos;
  • Take photos in bright, natural lighting whenever possible;
  • Use the highest resolution setting; and
  • Edit your photos by brightening, cropping, and/or straightening where necessary.

Online Real Estate Listing Sites

Once you have your photos completed, start uploading them to online real estate sites. There are several different ones. While it may be tedious to upload your listing to all the applicable sites, it will get your listing out to the widest possible audience. Look into using sites like:

  • For Sale by Owner (FSBO) websites, such as Zillow, FSBO, and HomeFinder.
  • Private sale sites, such as Kijiji and Craigslist.
  • The classified section of your local newspaper.
  • Your own social media channels.

MLS (Multiple Listing Service)

As mentioned earlier, the MLS is the most powerful marketing tool in real estate. All listings on the MLS are available for public viewing at REALTOR.ca. While only licensed real estate agents can list on the MLS, private sellers can get their properties listed on the service too. They simply need to hire a realtor who offers “Flat Fee Listings” or “Mere Postings.” These realtors offer basic services for relatively low fees. Starting at about $99 for a basic no-frills MLS post, and ranging up to $700-800 for a bundle of services, this is a cost that is well worth the expense.

Showing your Home

Most potential buyers will want to see your home in person before they submit an offer. Real estate agents typically host an open house, or arrange private showings by appointments, for this purpose. This is something that a private seller can certainly do on their own.

These tips may help you show your home to its best advantage:

  • Hold an open house at a scheduled time and private showings by appointments only. Both of these should be done at times convenient to you, so that you are not stressed or pressed for time.
  • Go through the steps for showcasing your home (above). Have all minor repairs and upgrades done, declutter, deep clean, and stage.
  • If you have pets, consider sending them to a doggie daycare, spa, or play date.
  • Make sure the temperature is set to a comfortable level.
  • Let in as much natural light as possible and turn on every light in the house.
  • Leave out refreshments like coffee, tea, chocolates, and wrapped candy.
  • Have printed information sheets or brochures available for potential buyers to take home.
  • Always stay at the property during showings. Make yourself available for questions, but give the viewers plenty of space so that they feel comfortable fully checking things out.

Showing your home is one of the easiest tasks to take over from a real estate agent, and it’s certainly worth it in order to save the realtor commission fee.

Once you’re at this stage of the process, the next step is accepting offers. And once you get an offer, it’s time for your real estate lawyer to get involved. If you choose to accept the offer, the lawyer will take you the rest of the way through, right to closing the sale.

Choosing to list your home with a realtor is the easier way to get a house sold–and also the most expensive. Realtor fees can eat up a substantial portion of your final sale price. While a realtor’s tasks are time-consuming, they can be done by a private home seller. If you can find the time, why not do it yourself and potentially save tens of thousands of dollars?