BC Realtor Commission
How Much is Realtor Commission in BC?
There are many expenses involved in a real estate transaction. One common question relates to the real estate commission in BC. Home sellers often ask not only who pays the real estate agent fees, but what those fees are. Figuring this out can be challenging when realtors have a complicated commission rate structure.
If you are selling your home, you need to factor in the real estate commission for the transaction. This is the fee you pay to your real estate agent for their services. Generally speaking, real estate agent fees and commission rates refer to the same thing. Knowing the exact expenses you will be facing can help you plan for this transaction.
How Much is the Real Estate Commission in Squamish, BC?
Realtor fees in BC will vary, as the Code of Conduct laid out by Canada’s Competition Act states that the fees are entirely at the discretion of the realtor. This can make it somewhat confusing to clients who may be expecting a standard rate. Often, sellers are uncertain about the amount they will pay in commission, as well as the amount of tax (GST/HST) that will be added to this fee once the property has sold and the new owners have taken possession.
Commissions paid to real estate agents usually range from about 3% to 7% of the final purchase price of the home. The precise amount depends on the region and the agent. This means that using this example, a $1 million home in Vancouver may have commission fees from $30,000 to $70,000.
The commission may also be structured in such a way that two percentages apply. Specifically, you might pay a certain percentage on one portion of the sale price, and a different percentage on the remainder. For example, the first $100,000 may have a fee of 7%, followed by the remaining balance at 3%. This means that a home selling for $1M would have a commission of $7,000 on the first $100,000 and then 3% on the $900,000 remaining.
Roughly half of the commission paid by the seller will go to their brokerage, while the other half goes to the buyer’s brokerage. Each brokerage will take a percentage of the commission with the remainder being paid to the Realtor. The exact percentage received will vary by the individual brokerage.
Keep in mind that like any other service, real estate brokerage service is subject to the Goods and Services Tax (GST) in Squamish.
Buyers Looking to Calculate Real Estate Commissions on a Purchase?
For buyers of a property in Squamish, the good news is that they generally don’t pay commission to the realtor. All the fees owed to the realtors and their brokerages come from the proceeds of the sale on the seller's side. They will be paid once the transaction is successfully completed and the new owners have taken possession of the property.
Although commission rates can be a bit tricky, we make things easier by providing a handy mortgage calculator.
BC Real Estate Commission Frequently Asked Questions
Q: Who pays the real estate commission?
A: In most cases, the property seller will pay the real estate commission fees for realtors. This commission will then be paid out by lawyers after the transaction has been completed.
Buyers will need to pay for the Property Transfer Tax. There are three rates to be aware ofwhen calculating the total property transfer tax amount. The general property transfer tax applies to all purchases of property and is calculated from:
1% of the fair market value up to and including $200,000
2% of the fair market value greater than $200,000 and up to and including $2,000,000
3% of the fair market value greater than $2,000,000
Q: Are real estate commissions high in B.C.?
B.C. commission rates are considered to be low compared to other provinces in Canada. The graduated commission system has a low marginal rate for the balance of a properties value over $100k. Therefor the higher priced homes will have less commission paid to the realtors.
Q: Are there any other costs for buying or selling a property?
Yes, both buyers and sellers will need to hire a notary or lawyer for the conveyance of the purchase or sale. The fees will vary depending of the lawyer or notary you choose.
If you're in the Squamish area, here are some reputable reccommendations for notaries and lawyers.
Towes & Company Barristers and Solicitors
Race and Company LLP
Jones & Co