REALTOR® Commission Rates For Buying and Selling Homes
So you’re thinking about buying or selling your home in Calgary, but haven’t gone through the process of utilizing a licensed REALTOR®, you may have inherited the property, are a first time buyer or seller, or have done transactions privately, and now you're wondering what a REALTOR® might charge for their services aka the REALTOR® fees!
First and foremost, REALTOR® fees are always negotiable and are not set in stone by any means. This means one agent or Calgary real estate team could charge differently from one another as they may offer more value or built in services than the other. A common REALTOR® Commission that you might hear about with listings is the 7 and 3 model, which means that a seller would pay $7,000 or 7% on the first $100,000 of their homes value, and then would pay 3% on the remaining balance thereafter. For example, if a home is sold for $500,000 the seller would see commission fees of $7,000 on the first $100,000 and would then pay $12,000 (3%) on the remaining $400,000 for a total of $19,000 which in most cases is divided into two, $9,500 would go to the listing or selling agent while the other half would be given to the buying agent (the one who brings buyers and successfully negotiates a deal with you the seller).
If that doesn't make sense - take our REALTOR® Fees tool for a trip at the end of the article click here to see exactly how much you'll pay to sell your home.
How Calgary Brokerages Are Setup
With regulations and regulators in place, designed to protect the consumer, all REALTOR® real estate contracts and deals are seen through a registered real estate brokerage, this means that money seen in the transaction (deposits) are held in trust through these brokerages, and every agent must be associated with a registered brokerage at the Real Estate Council of Alberta or RECA as it is sometimes referred to. The Real Estate Partners for example we're once apart of Re/Max First and now are housed at Real Broker one of the top producing and highest brokerages in Alberta, and a leading digital brokerage in the world, allowing us to offer even more for our clients.
It's important to note: Your REALTOR® fees or commissions will never, under any circumstances be paid directly to the agent, and if your agent is asking you to do so, you should contact the Real Estate Council of Alberta and their designated brokerage, agents doing this are directly breaking the rules and this should be addressed immediately.
Typically, the listing brokerage that represents the seller will disburse all commissions to the buying and selling REALTORS® which means through your contract with the brokerage and the designated agent, you will have the brokerage perform all designated payouts per the contracts signed.
How Much does it cost to buy a home with a REALTOR® on your team?
When you're ready to buy a home, give us a call at 587-578-7653 to book a buyers consultation with one of our agents, we do not charge you to utilize our services (Even if you end up not buying a home) and our REALTOR® fees are paid by the seller only if you find a home!
What about new builds? Fortunately even new build home buyers will not incur any REALTOR® fees for our services! Utilizing one of our agents give you a distinct advantage in your next new home purchase, our team works closely with some of Calgary's top home builders and we have inside access to new homes and developments, as well as insider pricing and promos offered by the builder and an expansive product knowledge allowing us to recommend the best housing products, layouts, and upgrades, that will help you love your home longer, and maintain resale value.
The Real Estate Brokerage Agreement
In Alberta, buyers must sign a service agreement with their real estate agent if they want to utilize them for their transaction, these agreements can be under two different types of agreements an exclusive buyer representation or a non exclusive buyer representation agreement - This has been in affect since 2014 and provides clear and concise documentation of REALTOR® fees for the buyers and expectations between both parties (buyer and buying agent)
Selling with a REALTOR® in Calgary
When it comes to selling your home, it's important to consider what the agent will be doing to get your home in front of the most buyers online, and ensuring you sell it for the highest sale price possible. Consider their services, from marketing and their investment into the sale of your home, to aerial footage, interior videos, print, photography, paid advertising, and more, how much does the agent or team invest to get your home sold.
A few things to consider as a seller
- Are commissions negotiable? Yes. But consider this, If the agent you’re considering is willing to negotiate their commissions and REALTOR® fees, their is a chance that they're just as willing to negotiate your homes price just as easily. The other factor to consider is If the real estate agent offers a full service package for listing your home, if so, they should be easily justify their rates they’ve given, and if they’re easily brought down in their price, how can you expect them to negotiate on your behalf? Our team has a thorough marketing package that we execute on all homes we list, obtain a free home evaluation to understand your homes value and how we market homes differently from everyone else.
- Is the agent full or part time? Our team consists of full time REALTORS® who are dedicated to buying and selling homes. It's important to consider your needs and requirements from an agent and who you should have in your corner. Roughly half of the licensed agents in Calgary will only perform 1 - 7 transactions per year, our team has many agents who perform 3-5+ on a monthly basis.
In 2021 we served over 385 families in the Calgary and surrounding area real estate market
In 2022 by Q1 Our team was buying or selling a home every 14 hours
Did you know that we donate a portion of all of our real estate fees to great causes? Our team has been one of the biggest contributors to the Children's Miracle Network
Commission Fees For Buyer REALTOR®
In Alberta and Calgary, it’s most common for the sellers in a transaction to cover all REALTOR® fees, our team to date has never charged our buyers for our services as we almost always collect our REALTOR® Commissions through the sellers as well in all scenarios, even in for sale by owner situations (private real estate sales or FSBO’s) or when a home is listed through what some label a discount brokerage.
Home buyers - this is not a topic your agent should skirt around, your agent should always be upfront with you about when discussing their REALTOR® fees - Who is paying them and how they are being paid should never be left to doubt.
When buying a home, if you’re looking for professional real estate advice, with no cost to you as the buyer, you should reach out to the real estate partners team with REAL BROKER, where you can obtain expert advice, expert negotiation skills, proprietary buyer programs and resources, off market homes, and much more at absolutely no cost to you! Money in these transactions whether you’re a buyer or seller will never flow through from agent to agent and will always be held in trust with a brokerage.
Selecting a Trustworthy Calgary Realtor®
One of the best things you can do is your own due diligence - Below are two of our recommended ways of sourcing whether you're working with a well reviewed agent who can demonstrate their proficiency in the real estate market.
Sites like RankMyAgent
are great places to start reading reviews on REALTORS® within the Calgary real estate market and surrounding areas. Our team has hundreds of reviews online from the sites listed above to our Facebook page, and some great feedback on our Calgary Real Estate Youtube Channel!
What can't a REALTOR® charge me?
Calgary can serve up dynamic real estate market shifts, which presents opportunities for agents to sell homes for sometimes far more than expected. A REALTOR® is not allowed to sell your home for the difference though. What does that mean? Well lets say you think your home is worth $500,000 and that's what you want for it, and the home ends up selling for $550,000 - A real estate agent cannot sell your home with a structure that pays them for anything greater than your desired price (In this instance $50,000) this is strictly prohibited.
Realtor® Fees Calculator
Please keep in mind, this calculator is only based on the REALTOR® fees structure of 7/3 (explained in the article and below) Although they're quite uncommon in this market, there are various other commission fees we've seen in the Calgary real estate market, these include:
- REALTOR® Fees that are set as a fixed % of the total sale price. %5 For example would be split between both agents (buyer/seller) $1,000,000 sale X 0.05 = $50,000
- An hourly rate - This is quite uncommon and is typically structured for very unique situations
- Flat rate commission fees - For example a seller may simply negotiate a flat rate to sell their home.
Contact us for any questions about buying or selling a home!
*Please note, this is not legal advice, this is professional real estate advice, this blog is for informative purposes and you should always discuss these topics with an active licensed REALTOR® to ensure you're receiving the most accurate and up to date information possible. While the information here is believed to be accurate, we cannot guarantee it and recommend you seek independent legal advice for any matters relating to your individual legal real estate needs or concerns.Posted by Cody Tritter on
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