Real Estate Commissions in B.C.
There is no standard real estate commission rate in British Columbia. As a home seller, you can negotiate the commission with your listing agent or choose an alternative real estate fee model.
How much is the typical real estate commission?
In general, real estate agents work on a commission basis and receive payment only after the successful completion of a sale. The commission is usually stated as a percentage of the total home sale price or as a fixed dollar amount. While the typical realtor commission rate in the Vancouver area is 7% on the first $100,000 of the sale price and 2.5% on the balance, there is no standard. The real estate commission rate is not set by law or the real estate board it is negotiable between home sellers and their agents. The seller’s brokerage traditionally splits this commission with the agent who brings in the buyer.
|Home sale price, $||Commission amount, $||Commission as % of home price|
Is it a fair compensation?
As you can see from the table above, the realtor commission rate is not that high in percentage terms, but it still eats a substantial chunk of your investment. While most home sellers are prepared to pay this commission rate, you may choose one of the alternative real estate fee models that have sprung into existence recently as a result of the following developments:
- The significant increase in property prices (house prices in Vancouver more than doubled over the past decade) means higher real estate agent commissions.
- The universal reach of online technologies makes it easier for home buyers to search for properties and cheaper for home sellers to market their properties.
- Following the agreement with the Competition Bureau, the Canadian Real Estate Association (CREA) officially recognized the right of home sellers to choose which services they want from a real estate agent and pay for those services only.
Shall I choose an alternative fee model?
The alternative models can be roughly grouped into the following categories:
- flat-fee service packages, starting from the "listing on MLS® only" option
- fee-per-service options, where a home seller pays for each selected service separately
- discount brokerages or agents, who offer a traditional and, in most cases, limited set of real estate services at a lower cost
If you choose a flat-fee or discount agent, make sure to firmly establish the level of service to be provided and the fees to be paid. Although the alternative discount business models may give more choice to consumers, they still have a limited market share. According to the National Association of REALTORS®, sellers overwhelmingly (80%) work with an agent who can provide a broad range of services and manage most aspects of the sale.
Can I get full service at a discount rate?
If you'd like to get the top-quality full service of a RE/MAX agent at a discount cost, please check my low commission rates and service package for sellers. In addition, I offer a cash-back to my buyer clients