There’s a common misconception out there that buyer’s don’t have to worry about their agent’s commission because the Seller pays it. Unfortunately, it’s like the “free” whistle in your box of cereal. Do you really think it’s free? Of course you don’t, you know it’s costed in to the product along with everything else and that cost determines the selling price. You paid for it in full.
It’s the same with commission. Most agents in BC charge a Seller 7% on the first $100,000 and 2.5% on the balance. On the sale of a one million dollar home, for instance, that works out to $29,500 (forgetting GST for the moment). The Seller’s agent then splits the commission (roughly 50/50) with the buyer’s agent.
Now here’s the thing. Sticking with our million dollar home, the seller has calculated that commission in to what his bottom line is. If he needs to get $950,000 out of the deal to buy his new home then he has calculated that he can’t accept anything less than around $980,000 in order to pay their agent’s commission. Therefore, a home you could have got for $950,000 you are paying $980,000 for. In other words, you paid the commission. At the very least, you both paid the commission.
Now I’m the last person to say that Realtor’s shouldn’t get paid but if I’m willing to sell a home for 1% (.5% for me and .5% for the buyer’s Realtor) why wouldn’t I be willing to help a Buyer for the same?
My deal is simple. I charge Buyer’s a .5% commission (minimum $3,500 just like I do Sellers) plus a $700 administration fee. Instead of a charge to you though, any surplus commission earned is refunded back to you when the sale is completed and I am paid my commission by the listing agent. Something that happens automatically on the completion date.
Going back to our million dollar home that means you would get back $9,050!!! (half of the agents commission of $29,500 – my .5% plus $700 fee)
Let’s take a look at it from your own perspective
The graph shows how much you will save if you choose Walter Ekins, One Percent Realty as your buyer agent.
* There is no “commission standard” in the industry but most agents are “typically” charging their sellers a commission of 3.255% on the first $100,000 and 1.1625% on the balance for the Buyer’s agent.
All normal Realtor’s services are the same including:
- Researching the home and determining fair market value for the calculation of your offer.
- Obtaining and analyzing any documents such as Tax Information, Title Search, Property Disclosure Statements and/or Strata forms
- Contacting Seller’s agent to view the home and attending with you
- Negotiating with Seller’s agent
- Making sure all documents pertaining to the purchase are filed and handled properly
- Working with your lawyer or notary to complete the sale
- Obtaining keys on Possession and making sure the home is as is when viewed by you and all is in place
- GIVING YOU YOUR CHEQUE!