There was a time, not that long ago, when the selling price of a good home in the Toronto area was about $60,000. Back then the commission rate charged on most home sales was a standard five per cent with an extra point added on if the property was put on the MLS system. It was a different time.

I am saddened to say that Realtors had a better public image in those days. Back then it was understood right up front that the commission rate generally was five per cent. It was further understood by the public that Realtor commission rates increased in rural or hard-to-reach areas like cottage country. The public knew the commissions Realtors earned were usually split between the Realtor who listed the property and the Realtor who brought in the customer who bought it. So in the case of a big city property sale of $60,000 at six per cent on MLS, both sides got about $1,800 commission.

In those days people knew that both Realtors involved had expenses to pay. Realtors had to pay for advertising, cars, office costs and all manner of overheads, not to mention their own mortgage or rent and other personal expenses.

So that $1,800 did not go all that far once all the expenses were paid out. A good Realtor back then might make about 10 sales in a year. That was a pretty good clip. So that meant a good Realtor was making about $18,000 a year. Even back then, that was not the life of luxury. It was a good living though.

Today the numbers are bigger but I would still say a good Realtor might sell about 10 homes in a year. Just like back in the day. I know it’s a wide scope. Some Realtors sell 10 properties in a week; some don’t sell any for a whole year. What has changed, it seems to me, is that commissions are not talked about as openly as they used to be. Why is that?

Let’s say a Realtor sells a home for about $400,000 in a big city today. If the commission is five per cent, then the payment is $20,000. That is a serious amount of money but it is likely that this money undergoes splits that may be more complicated than they used to be. Realtors work with more people and systems to market properties and negotiate good prices. They pay out much greater expenses proportionately than back in the day. Still, at 10 property sales per year, a Realtor can make a good living but after expenses, it is not the height of luxury.

Remember, this is a good Realtor dealing with big city prices. I don’t think that every home a Realtor sells is going to be as much as $400,000 but the critics will want to use a number like this for major cities. Smaller towns are a lot different. I have already been scolded about making sweeping generalities but I have to in order to make this point.

There is no doubt Realtors have some public relations work to do to overcome the paranoid, dollar-store attitude some sellers have about the payment of a reasonable commission. Compromising commission on the most important investment anyone will ever make is beyond common sense. We can all point out that a good Realtor will make their customer more money than the commission they earn, but there will always be those who insist on selling their homes privately. They are free to do so, and they are also free to tell everyone how smart they were and how much money they made or saved depending on how the story is told… even when that is so often not true.

The bottom line is that Realtors must continue initiatives to truthfully show the value and meaningful role they have in property sales. They must do this through a well-thought-out professional campaign of advertising and public relations.

I believe that campaign must begin with up-front honest talk about five-per-cent commission.

Heino Molls is publisher of REM. Email [email protected].