When an individual wants to buy a house, this is a task that comes with some work and expense. It is an exciting time in a person’s life even if it is not their first time home buying adventure. Like every industry, the real estate industry goes through changes. The ways of doing things can and does change. One of the significant changes that have taken place is the type of real estate broker that is available today. Now home buyers can take advantage of what discount real estate brokerages have to offer.

What are Discount Real Estate Brokerages?



Brokerage Real Estate Companies are those who are licenced to handle the buying and selling of real estate. They have the right to hire individual real estate agents who have passed a set of exams to equip them with the skills for selling a property. A real estate agent will commit to buying and selling of property under the name of the real estate brokerage company. In return for this, they will receive a percentage of the commission that is charged for selling the home.

Who Can Use Discount Real Estate Brokers?

Both the Buyer and the Seller Can take advantage of what a discount real estate broker has to offer. It depends on the type of discount program that is being an offer by a specific discount realtor.

The Seller:

Most often the discount on the commission fees being charged is reduced for the seller. An average rate of commission charged in Toronto is between 2.5% and 5%. This covers the obligations of both the buyer and the seller. This amount is commonly split between the listing agent and the selling agent. However different ratios of the split can be negotiated between these two individuals.

The Buyer:

The buyer is in essences paying some towards the commission because it comes out of the price they are paying for the house. It is intermingled in with the asking price of the property. If the seller is able to reduce the price of their property because they are getting a commission discount, then this benefits the buyer who will pay less for the property.

Another way a buyer may benefit as well is if the agent is offering them a cashback as a home buyer. This is a different plan that the discount commission program.

Where can These Types of Professionals Be Found?



This type of discount on real estate is becoming quite popular. Based on this a lot more brokers are now beginning to offer this option. In Toronto, several real estate companies are offering this as an additional option to traditional real estate. Then there are some that are classifying themselves as a discount brokerage firm only in the real estate industry.

What Makes Them Different Than Traditional Brokers?

What makes them different is in the amount of money they are expecting their clients to pay for their services. The discount programs can also vary significantly among the firms offering this.

Full Service with Discount Pricing:

These companies claim they will still do all the services that are typically required in the real estate transactions. This includes listing the property with MLS, other forms of marketing and advertising, and showing the home. Plus, looking after the paperwork for sealing the property transaction.

Reduced Service with Discount Pricing:

Other firms have chosen to minimize the full extent of their services for discounted clients. For example, they will take care of the MLS listing, but the showing of the home will be up to the clients. The selling agent will not necessarily be present during showings.

Traditional Services with Discount Options

A different approach that some firms have taken is to be a traditional real estate brokerage but offer options. For example, they may list their services then allow the client to opt out of some of these services. If they do, then they will receive a discount on the commission fees.

How Does This Affect the Home Seller?

Discount realty services can be a big advantage to the home seller. One of the most significant expenses that come with selling a home is the realtor’s commission. The more the house is sold for, the more commission is paid in a traditional setting.

How Much Can a Discount Real Estate Broker Save a Home Buyer?



An example of how money can be saved is this;

A traditional sale:

The realtor has agreed to sell a home for 5% commission. The house sells for $700,000. The realtor receives $35,000. In commission. Usually half of this (2.5%) will go to the selling agent which would be $17,500.

A Discounted Sale:

The realtor has agreed to discount the commission to 2.5%. The total commission paid by the home seller is $17,500. Here they have just saved themselves $17,500 when compared to the traditional sale example.

How Much Could a Buyer Save on a Home Buying Transaction?

Potential savings could be realized if the home buyer has opted into a discount program as it allows them to lower the price of the property so they can sell it faster.

If the home buyer has chosen to use a cash back realtor, they may realize even more significant savings. In this type of program, the realtor representing the buyer has made a deal with the buyer who is their client. This deal is to give them a specific amount of money back out of the commission that this realtor will be receiving.

Is There Any Risk With Using This Type of Broker?

Anyone that is legally acting in a capacity of a real estate has to be licenced as an agent then carry out their services under the name of a licenced insurance broker. A discount realtor is bound by these same regulations.

The risks only come in regards to what the home seller has agreed to omit from the realtor’s services. Also, the seller is responsible for carrying out those duties that they have not assigned to the realtor that is necessary to sell a home successfully. But, what is essential is to make sure the agency offering you the discounted rate is one that is a legal brokerage firm and not just a company that is providing home selling services that do not require a licenced realtor. For example, a company that is only going to take the home photos and advertise the home for sale.


When it comes to buying or selling a home in Toronto, there are some excellent ways to be able to reduce commission costs either through discount commissions or cash backs.

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