Real estate commission in B.C.
When a home owner decides to sell their home, they often agree to pay their chosen
salesperson / real estate company a commission based on a percentage of the selling price
of their home. The sale commission is specified in
the Listing Agreement when a home is listed for sale by a home owner. In British Columbia, the commonly used commission structure is based on 7% on the first $100,000 and 2.5% on the balance of the selling price. Other real estate companies may used 6% for the first $100,000 and 3% for the balance of the sale price.
| Home Price |
Commission Cost
|
As % Home Price |
| $500,000 |
$17,000 |
3.4% |
| $1,000,000 |
$29,500 |
2.95% |
| $2,000,000 |
$54,500 |
2.725% |
| $3,000,000 |
$77,500 |
2.583% |
Sale commission is negotiable
While majority of the home sellers accept paying the above commission fee structures when selling their homes, some may choose to negotiate on listing and their homes at discount commission rates. Sales commission is not fixed, and a discount commission or flat-fee commission can be negotiated. Full service Realtors are willing to provide full MLS and real estate marketing services at a discount. Not all home sellers are aware that they can negotiate for a discount when selling their homes. As in any business transaction, a home seller should
firmly establish the level of service they will be receiving and the fees they
will be required to pay.
How much is a fair compensation for selling a home?
This is not an easy question to answer. As can be seen from the above commission table, the sale commission as a per centage of the selling price is not that high. But, in dollar value, the sale commission for million dollar homes are substantial. Over the past 6 years when home prices double in price, Realtors are now getting paid two times the commission compared to 6 years ago! Realtor compensation and the sale commission sellers are paying has not been a big concern in today's market
Better access to MLS inforamtion through the internet, and less reliance on expensive print advertisement are helping the more computer savvy Realtors to offer substantial savings to home sellers. In a Seller market, when practically any home listed at fair market value is sold within a short time, home sellers are in a strong position to negotiate a "fair compensation" with a Realtor selling their home..
How much should a home seller pay?
A home seller's concern is at what "compensation" and how long it will
take for his home to be sold. Ultimately, a good understanding on the
market value of a home should be the starting point for the discussion.
The role of a Realtor is to represent the best interest of the seller,
and work on providing the market exposure of the home to other Realtors
and home buyers at large
If you are looking for a good Realtor who is prepared to negotiate with you for a fair commission to sell your home, you should check with your local network of Realtors. Not all Realtors are "discount brokers" willing to negotiate with you on the sale commission. Find out the service you can expect for what you are paying. You know you will save money on the commission you pay, just make sure you are getting a good Realtor who will also do a good job in selling your home.
You can use the links here to research homes for sale in Richmond and Vancouver.
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