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Who really pays the real estate commission?

Who really pays the real estate commission?

By ebizniz on October 6, 2007 - 8:02pm

A posting by James Wong at RE/MAX Westcoast.

In Greater Vancouver and Fraser Valley, home sellers pay 7% for the first $100,000 and 2.5% on the balance selling price of the homes. Using the above commission structure, the sale commission for a $600,000 home is $19,500 or 3.25% of the selling price. Real estate commission is not fixed and can be as low as $5,000 available from discount Brokers.

The real estate industry argument that the seller is paying the commission is a myth. The fact is that real estate commission is already included into the sale price. So the truth is that it is the market pricing mechanism that provide for the payment of commission in a real estate transaction.

As a buyer, you aren’t really getting the service for free!

BC Real Estate Agency Law

Legally speaking, the real estate agency law in BC specifies that all realtors work on behalf of the seller of a home and not the buyer? But in practice, a buyer’s agent represents the buyer.

When a home buyer has a realtor representing him in the negotiation of an agreement of purchase and sale, he has the full fudiciary and legal duty of the realtor. The buyer’s realtor is looking out for the best interests of the buyer, and he is not legally obligated to the seller in any way.

Homes for sale are listed on the Multiple Listing Service (MLS) under the local real estate boards. Virtually all of those homes are listed by realtors of a real estate board. And buyers mostly have their realtors driving them around looking at different homes listed on the MLS. When a home is sold, the agents split the commission.

If you are planning to buy or sell your home and like to find out more information on the process involved, you should check with your local Realtor.

Submitted by Anonymous (not verified) on October 6, 2007 - 10:11pm.

"buyers mostly have their realtors driving them around looking at different homes listed on the MLS"

Uh, no they don't. Most people search the MLS site on their own, tell their agent which properties they want and the agent meets them at the property.

$20 000 to make appointments, nice work if you can get it.

Submitted by Jon (not verified) on October 7, 2007 - 4:35am.

Its so tough to sell your house in Canada these days. First there are not enough buyer and on top of that home seller have to pay a huge commission to the real estate agent.

However, these days there are lot of Online Real-estate website which are gaining momentum and it lets you list your property ads for Sell of Rent for a very low price as compared to what you would pay to a Property manager.

I know quite a few websites like this but GoBestHome (http://www.gobesthome.com) is the most professional website that I came across for finding Aprtments in Vancouver or Apartments in Calgary and. The website is currently free. The let you Post an Ad or Search Ads on the website.

I would recommend checking out this site once.

-Jon

Submitted by Jay Banks (not verified) on October 17, 2007 - 5:36am.

I have found a neat little gadget on the web. It is called Walk Score. It helps people find walkable places to live. Walk Score calculates the walkability of an address by locating nearby stores, restaurants, schools, parks, etc. Just an example, I have tried to enter one of the homes our agency has for sale, downtown Vancouver (850 Cardero St), and it ended up with a walkability index of 85 out of 100. It is a nice toy, try it on your address.

Submitted by SB (not verified) on January 28, 2008 - 10:50pm.

BC Real Estate Agency Law

Legally speaking, the real estate agency law in BC specifies that all realtors work on behalf of the seller of a home and not the buyer? But in practice, a buyer’s agent represents the buyer.

You need to learn about Exclusive Buyers Agency Agreement. It appears that sadly you must have slept through your PDP and REP courses.

Wow, an agent with 18 years of experience is passing out false information. I invite anyone to search for this topic on the Internet and decide for yourself.

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