How Much Are Commissions for Realtors® in Calgary, Alberta?
There is no such thing as a standard or fixed commission in real estate. This is a federal law, under the Competition Act. The only time you may have a standard commission is if a single office demands it However, in every marketplace, there is a commission that is considered a full commission. I’ve been in the real estate industry for 25+ years, and my entire time in the industry in the Calgary marketplace, full commission has always been considered to be 7% on the first $100,000 and 3% on the balance of everything over $100,000. The listing Realtor® gets half and the Realtor® that brings us the buyer, the buying Realtor®, gets half. Therefore, 3.5% for the first $100,000 and 1.5% for the balance that is over $100,000 goes to both the listing Realtor® and the buyers Realtor®. Normally, the seller pays the commission; the buyer pays no commission. The seller will want to negotiate a commission with the listing agent or whoever it is that they’re interviewing. However, it’s important for the seller to understand that the commission should be reduced on the listing Realtor’s® side, and he or she would not want to reduce it on the buying Realtor’s® side. The reason is that within the MLS®, the buying Realtor® can see how much they’ll make on the transaction, and unless there will be what they consider to be full commission, the buying Realtor® may think, Well, I’m not getting my just due over there. I think I just won’t show that property. This flies in the face of the Laws of Agency, because the buying Realtor® is supposed to act in the best interest of their client. But as the old saying goes, “money talks,” and with a lower commission, the buying Realtor® may naturally be less motivated to show the property. Even though this isn’t right, what goes on inside the buying Realtor’s® mind can’t be proven, and therefore a lower commission may result in less exposure for a home, and therefore fewer potential buyers. Furthermore, the Realtor® may have a Buyer Brokerage Agreement with the client stating he will be paid 3.5% on the first $100,000 & 1.5% of the balance from the seller. If a seller is offering less then the buyer will have to make up the difference or whatever complies with the Buyer Brokerage Agreement. As is true with all things, when dealing with commissions, you get what you pay for, and saving a couple thousand dollars on a reduced commission could ultimately cost you thousands and thousands of dollars when it comes to advise and the negotiations. There are companies out there who refer to themselves as offering full service with discount real estate commissions. But I wonder what exactly are they discounting since there are no set fees for commissions. In order for the sale of your home to go as smoothly as possible, it’s most important to hire a Realtor® with a lot of experience, a good reputation within the real estate industry, who will give you full exposure for the sale of your home. And while commissions are negotiable, it’s best for sellers to pay what is considered to be full commission at least to the buyer’s agent so that their home receives as much exposure as possible. This is, in my opinion, the number one strategy for selling your home. Find a Realtor® who has experienced the trends within your Marketplace, that can give you knowledgeable advise and is an expert negotiator! If you would like to know more about our services check out our HOME SELLER page for more information, and of course we would love to hear from you if you have any comments or questions.
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