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Brian Madigan LL.B., Broker

RE/MAX West Realty Inc.,
Independently owned and operated

96 Rexdale Blvd. 
Toronto, Ontario 

Phone: 416-745-2300

Cell: 647-404-8150 
Toll Free: 1-888-507-0817

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Cost Plus Arrangements To Be Allowed for Real Estate Deals

April 21, 2013 - Updated: April 21, 2013




One of the issues of concern to the real estate profession has been the restriction to charge either a fixed amount or a percentage of the sale price.


The difficulty had been that some vendors thought their properties were worth a fortune. Reluctantly, some agents (even good ones) would take on an overpriced listing, hoping that throughout the duration of the listing, the vendor would “see the light” and reduce the price.


Oftentimes, the listing would simply “expire”, or the vendor would “miss the market”.


This resulted in the agent having run up a series of expenses and front-ended the vendor’s overly optimistic speculation of the market value.


Now, that can come to an end. Agents will be able to charge for their “front-end, fees, costs, disbursements etc.” if the property doesn’t sell.


The existing compensation arrangement has always seemed not only anti-competitive, but anti-agent.


The Ministry of Consumer Services has proposed changes to the Real Estate and Business Brokers Act, 2002, which will allow real estate agents to charge:


  • Commissions
  • Fees, or
  • Both commissions and fees


The Act also required, should the compensation arrangement provide for a percentage, the percentage, if it changed, had to be on a downward sliding scale.


That simply doesn’t make any sense. Why not have an upward sliding scale? The more money I sell it for, the more money I make! But, this time around, the choices are just a fixed percentage or a downward sliding scale percentage.



Brian Madigan LL.B., Broker is an author and commentator on real estate matters, if you are interested in residential or commercial properties in Mississauga, Toronto or the GTA, you may contact him through RE/MAX West Realty Inc., Brokerage 416-745-2300.

Tagged with: commissions fees charges costs disbursements rebba 2002
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Brian Madigan LL.B. Broker

RE/MAX West Realty Inc. Brokerage

Independently owned and operated

96 Rexdale Blvd. , Toronto Ontario,

Phone: 416-745-2300

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