It is not a legal requirement to have a real estate agent assist you with the purchase of a home. Although, sorting through the homebuying process without a real estate agent would make the whole ordeal rather stressful and complicated for the novice homebuyer.
Real estate agents exist to take the administrative and logistical burden away from their clients and provide guidance, experience and negotiation skills to help them get the property they want and need.
Finding a real estate agent
There are hundreds of ads posted everywhere, promoting the accolades and accomplishments of local real estate agents. These agents may specialize in specific neighbourhoods or specific building types.
To help find a knowledgeable agent for your needs, narrow your search by neighbourhood. Looking for someone that knows High Park-Swansea in depth will be better than looking for an agent that works in the Toronto area generally.
Do some background research on any agents of interest, scope out their websites, read reviews, and feel free to ask any important questions before signing on with them. You may also know a recent homebuyer who was impressed with a particular agent’s work, and is excited enough to give you a referral.
What does the agent do?
If you’re wondering what exactly a real estate agent does in exchange for their fee, you’ll be happy to know that they remove many of the logistical complications, helping them complete the homebuying process successfully with as little stress as possible.
First, real estate agents will provide you with an extensive list of potential properties they know are on the market, based on your preferences. If you’re looking for a two-bedroom condo, for example, an agent will provide you with a range of two-bedroom properties along a sliding budget scale. This helps you see what you can get for different prices and weeds out the properties that fail to meet your criteria.
Next, real estate agents provide their clients with a wealth of expertise, education and advocacy help. This means that agents will work to make sure you understand complicated terms, processes, legal fees, tax information and any other aspects that pertain to the purchase.
Making sure you’ve found the right property
Once you’ve decided on the unit for you and you’ve gone to see the space, the real estate agent will make sure you’re making an educated decision. From explaining the advantages and disadvantages of the building and its location, to reviewing potential maintenance fees and condo board bylaws you need to understand.
Taking action and making an offer
A real estate agent will work tirelessly on your behalf to get the best deal on the property, and negotiate clauses, terms and conditions to strengthen your bargaining position.
An experienced agent will know whether the unit is priced too high or low, giving them the leverage needed to make a competitive offer. They’ll also be able to give you an estimate of how much you’re likely to pay inclusive of mortgage interest, maintenance and upgrades, legal fees, condo fees, inspections and applicable taxes.
Technically, the seller is responsible for paying the real estate agents on both sides. They do this by factoring in real estate agent costs into the sale price of the home. Since the buyer essentially covers the sale price through the transaction, the buyer effectively covers the costs of both agents.
Typical real estate agent rates are around 5% of the sale price, however, there may be other costs for paperwork and/or legal items detailed on a case by case basis.