Real Estate

BC real estate commissions

  • Last Updated:
  • May 3rd, 2021 9:38 am
[OP]
Member
Jun 11, 2015
488 posts
520 upvotes
Vancouver, BC

BC real estate commissions

I'm looking to sell a $2m+ house. I've been quoted 7% on the first 100k and 2.5% on the remainder by several agents, split approximately 45/55 between buyer's agent and seller's agent. That's going to be about $35k to the seller's agent and $30k to the buyer's agent.

I'm fine with the buyer's agent commission. Smart buyers get a lot of that rebated anyway.

I'm a bit less comfortable with the sellers commission. I understand realtors need to make a living, and I don't begrudge them that. I'm too busy to sell this personally, so I will use an agent.

However...

1) How much is it customary to negotiate this down? The local realtors all seem to collude on 7% / 2.5%. There can't be twice as much work selling a $2m house as a $1m house, yet the commission is almost twice as high. It isn't clear how much flexibility I have, whether agents will do a poor job if I'm pushing below market, or whether I even want an agent willing to negotiate.

2) Should I be pushing for a rebate for unrepresented buyers? The standard appears to be that the real estate agent gets paid twice if the buyer is unrepresented. This appears to be a massive conflict of interest.

3) Are good agents going to be open to alternative structures? The ones I've talked to don't seem to be. The agent's pay isn't really sensitive to their work, just to their volume. They make far more selling twice as many houses for less than market than they would selling fewer houses for good prices. I'd much prefer, say, paying them $200/hour PLUS 10% of the sale price above $2 million. That would at least ensure they have the right incentives to maximize the price.

I'm not seeking to reinvent the wheel here, but I don't want to be the sucker who buys a pickup at MSRP. How much should I be getting off? (I believe the right answer here is to list it myself with a 1.6% buyer's agent commission, unfortunately I do not have time)
4 replies
Deal Fanatic
Jun 29, 2007
5597 posts
2138 upvotes
Vancouver
There are agents out there who will charge less for the listing fee but yet provide you full service. Pay less commission to listing agent and pay full commission to selling agent or you can choose whatever amount you want to pay selling agent.

One flat fee and 1% realty are two I can think of.

Real estate commission is way too high to begin with.
Deal Addict
Jul 10, 2014
3451 posts
1599 upvotes
Ottawa, ON
TWELVES wrote: I'm looking to sell a $2m+ house. I've been quoted 7% on the first 100k and 2.5% on the remainder by several agents, split approximately 45/55 between buyer's agent and seller's agent. That's going to be about $35k to the seller's agent and $30k to the buyer's agent.

I'm fine with the buyer's agent commission. Smart buyers get a lot of that rebated anyway.

I'm a bit less comfortable with the sellers commission. I understand realtors need to make a living, and I don't begrudge them that. I'm too busy to sell this personally, so I will use an agent.

However...

1) How much is it customary to negotiate this down? The local realtors all seem to collude on 7% / 2.5%. There can't be twice as much work selling a $2m house as a $1m house, yet the commission is almost twice as high. It isn't clear how much flexibility I have, whether agents will do a poor job if I'm pushing below market, or whether I even want an agent willing to negotiate.

2) Should I be pushing for a rebate for unrepresented buyers? The standard appears to be that the real estate agent gets paid twice if the buyer is unrepresented. This appears to be a massive conflict of interest.

3) Are good agents going to be open to alternative structures? The ones I've talked to don't seem to be. The agent's pay isn't really sensitive to their work, just to their volume. They make far more selling twice as many houses for less than market than they would selling fewer houses for good prices. I'd much prefer, say, paying them $200/hour PLUS 10% of the sale price above $2 million. That would at least ensure they have the right incentives to maximize the price.

I'm not seeking to reinvent the wheel here, but I don't want to be the sucker who buys a pickup at MSRP. How much should I be getting off? (I believe the right answer here is to list it myself with a 1.6% buyer's agent commission, unfortunately I do not have time)
You've nailed it, OP. MLS is a mafia and makes it very hard to operate on your own terms which is ridiculous since it's your $2m investment. Find a realtor that has common sense as they will agree with you and be more willing to negotiate. Anyone who gets offended or sour is a shitty agent to begin with.
Deal Fanatic
Oct 7, 2007
9252 posts
5086 upvotes
Could OP also not just work the commission into the selling price?
Banned
Apr 29, 2021
91 posts
85 upvotes
choclover wrote: Could OP also not just work the commission into the selling price?
What do you mean? The commission is baked into the selling price. They want to keep more of the selling price rather than giving it to the selling agent.

Best thing to do is talk to a bunch of listing agents and price shop the commission. Ask them for their best commission deal. Once you have the best deal, run it by all the realtors again and see if they will beat it. Rinse and repeat until you grind it down as low as possible while also maximizing the services they provide. This is how realtors sell houses so they should be well aware of the process. Smiling Face With Open Mouth

Top