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1% Realty

May 23, 2014, 1:52 p.m.
Posts: 16162
Joined: Nov. 20, 2002

For a "cheap" home in Vancouver area, about $1 million, just to keep the math easy. That would be $10,000 in commission at 1%. Split between seller's and buyer's agents that is $5,000 each. If an agent puts 100 hours into their part of the sale or purchase, that's about $50/hour in wages.

Yes, I know some will scream "but the agents have other expenses" blah blah blah. Well, those expenses are shared between all of agent's listings. And I'll bet few sales require 100 hours of effort by either agent.

So … what are we paying for, again? MLS listings, some advertising in papers and free distribution leaflets, agent's license fees and some time to show the seller's house or to show buyers a few homes to choose from. BC normal fees are 7% of the first $100k and 3% of the remainder. Can anyone - I mean honestly, from the heart, without laughing - defend $34,000 commission on that $1M sale? Really?

Does a $2 million listing really mean that the agent is putting twice the effort into the sale? In this market? I call BS on commissions as a proportion of the sale price.

I'm happy to pay fair value for a service. But that is not. Fair.

When one person suffers from a delusion, it is called insanity.

When many people suffer from a delusion, it is called religion.

May 23, 2014, 1:58 p.m.
Posts: 11123
Joined: June 4, 2008

So … what are we paying for, again?

A monopoly on data.

May 23, 2014, 9:15 p.m.
Posts: 7707
Joined: Sept. 11, 2003

For a "cheap" home in Vancouver area, about $1 million, just to keep the math easy. That would be $10,000 in commission at 1%.

Purchase Price $1,000,000
Sellers Agent Commission $15,913
Buyer Agent Commission $13,588
GST $1,475
Seller Receives $969,025

If you are selling one property and buying another, one dick move you can try to pull is to negotiate with the same realtor to handle both sales (ie get the realtor of the property you want to buy, sell your property as well) and have a motivated agent while getting a discount on the commission.

Assumptions: 7% fee charged to the first $100,000 of purchase price, remaining balance charged fee of 2.5%, GST charged 5%. Buyers agent receives 3.125% on the first $100,000 and 1.1625% on the balance.

Source: British Columbia Realtor Commission Calculator
http://www.mikestewart.ca/tag/bc-real-estate-fee-commission-calculator

The buyer pays a Proptery Transfer Tax of: $18,000.00

The tax is charged at a rate of 1% for the first $200,000 and 2% for the portion of the fair market value that is greater than $200,000.

Source:
Understand Your Taxes - Property Transfer Tax

http://www2.gov.bc.ca/gov/topic.page?id=44BE9E3F54994721A06EEFFBC5FA06DB[HTML_REMOVED]title=Understand%20Your%20Taxes

May 24, 2014, 11:05 a.m.
Posts: 14413
Joined: Nov. 20, 2002

nobody makes you use a realtor so why are they still around why didn't they go the way of the dodo bird or really heavy freeride bikes?

They exist because the market lets them, you can still FSBO your house or buy without an agent, or negotiate a lower% or whatever and every deal/market condition is different, maybe in a sellers market you don't need a agent, I know if i hadn't paid the last agent it would have been tough to sell from 400kms away and in retrospect I would have missd the absolute peak and been chasing the bottom of a rapidly falling market so I am satisfied I got value

Ok so I sound like an RE fanboy but I know I have used RE agents and not felt I got my moneys worth but I would say I have used more good agents than bad and really you have to look in retro-spect at what was going on in your life and the market could be a falling market or a divorce or a move OR ???

you can't just say I paid this asshole x amount of money and he didn't do fuck all if you don't like the agent then can him, but if a listing expires without selling ask your self why it didn't sell maybe the agent is an asshole or maybe its you …ask a realistic price

if you FSBO you don't get the market penetration, awhile back I bought a house on low commmish, the agent told me "no body is showing this house cuz of the low commission, normaly there would be a big stack of business cards left by agents who showed to buyers but there are hardly any cards left cuz no agent shows this house unless somebody asks to see it…like you "

May 24, 2014, 3:59 p.m.
Posts: 19
Joined: Nov. 20, 2002

nobody makes you use a realtor so why are they still around why didn't they go the way of the dodo bird or really heavy freeride bikes?

They exist because the market lets them, you can still FSBO your house or buy without an agent, or negotiate a lower% or whatever and every deal/market condition is different, maybe in a sellers market you don't need a agent, I know if i hadn't paid the last agent it would have been tough to sell from 400kms away and in retrospect I would have missd the absolute peak and been chasing the bottom of a rapidly falling market so I am satisfied I got value

Ok so I sound like an RE fanboy but I know I have used RE agents and not felt I got my moneys worth but I would say I have used more good agents than bad and really you have to look in retro-spect at what was going on in your life and the market could be a falling market or a divorce or a move OR ???

you can't just say I paid this asshole x amount of money and he didn't do fuck all if you don't like the agent then can him, but if a listing expires without selling ask your self why it didn't sell maybe the agent is an asshole or maybe its you …ask a realistic price

if you FSBO you don't get the market penetration, awhile back I bought a house on low commmish, the agent told me "no body is showing this house cuz of the low commission, normaly there would be a big stack of business cards left by agents who showed to buyers but there are hardly any cards left cuz no agent shows this house unless somebody asks to see it…like you "

Why? People are lazy. I just finished changing my water main. Cost me ~250$ instead of ~4000$

http://www.epiccyclist.com/

May 24, 2014, 6:42 p.m.
Posts: 14413
Joined: Nov. 20, 2002

I know a lot of people who should have their tools taken away let alone be allowed to change their water main

I think Lazy could be one reason people pay an agent but its not the only reason,and since we are talking about a lot of money so what if you fuck it up?

May 24, 2014, 8:19 p.m.
Posts: 8242
Joined: Dec. 23, 2003

They exist because the market lets them

I'm sorry but seriously what bullshit…its a full racket, that the big realty companies control and maintain ,so as they don't lose their wildly inflated commissions…

May 24, 2014, 8:21 p.m.
Posts: 187
Joined: Nov. 23, 2002

if it's so easy and such a money grab then why are you guys working as realtors?

context is everything

May 24, 2014, 9:10 p.m.
Posts: 7566
Joined: March 7, 2004

if it's so easy and such a money grab then why are you guys working as realtors?

Because they're all riding the gravy train having 3 months a year off as teachers.

May 24, 2014, 9:31 p.m.
Posts: 14413
Joined: Nov. 20, 2002

I'm sorry but seriously what bullshit…its a full racket, that the big realty companies control and maintain ,so as they don't lose their wildly inflated commissions…

so why don't home owners just sell their own house cuz how hard can it be just like changing your own water main or fixing your own teeth (if we were in the US I would say taking out your own apendicts but HC is universal in Canada) ?

AND if everybody did that we wouldn't have any RE agents because they would not make any $ so the RE companies would just go bankrupt, Remax would die off and so would those people with the ugly baby shit colored blazers … how hard can it be?

but thru wild RE market fluctuations, the 1%, the 3%, the web sites where you can sell your own home, thru all of it the fullservice RE companies and the good and probably some of the not so good agents are all still there SO … one of us must be wrong ?

May 25, 2014, 5:55 a.m.
Posts: 8242
Joined: Dec. 23, 2003

Wheres the flogging a dead horse button on this tap a talk thingy?

May 26, 2014, 10:13 a.m.
Posts: 7707
Joined: Sept. 11, 2003

Sell you house on Craigslist or EBay. EZ!

May 26, 2014, 10:37 a.m.
Posts: 14413
Joined: Nov. 20, 2002

I sold a house for a buddy while riding on the skyline chair, you have a captive audience for a 15min sales pitch , he was real happy and gave me a case of beer

May 28, 2014, 9:33 a.m.
Posts: 312
Joined: Sept. 13, 2006

Did a FSBO in Kelowna a few years back.
Ran it on Craigslist and in the newspaper.
Got a bunch of people looking at the place and ended up selling to a couple who saw the ad in the newspaper (!).
Cost me a couple grand in lawyers fees.
My Plan B was to call in a real estate agent if I could't sell it myself.
What's the harm in trying a FSBO or using 1% before calling a realtor?

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