Real estate commissions are the fees you pay to your real estate agent for their services. In BC, real estate agent commissions depend on the sold price of the property and are split between the seller and the buyer agents.
Buyers never pay any commission directly to their agents. The buyer’s agent commission is paid by the seller after the transaction closes and is based on the sale price. While in most parts of North America the buyer’s agent gets the same or more than the seller's agent, in the Greater Vancouver Area the standard split is 45% for buyer’s agent vs. 55% for the seller’s agent. The buyer’s agent commission varies between different cities in British Columbia:
Buyer’s agent commission in Greater Vancouver Area: 3.125% on the first $100,000 of the home price and 1.1625% on the remaining total.
Buyer’s agent commission in Fraser Valley Area: 3.22% on the first $100,000 of the home price and 1.15% on the remaining total.
Buyer’s agent commission in Victoria Area: 3% on the first $100,000 of the home price and 1.5% on the remaining total.
Buyer’s agent commission in Kelowna: 3.5% on the first $100,000 of the home price and 1.75% on the remaining total.
The typical commission for the seller’s agents varies between different cities in British Columbia. In the Greater Vancouver Area and Fraser Valley, seller’s agents’ commissions are higher than those for buyer’s agents. In the rest of B.C., they are roughly equal. However, these days many agents are willing to lower their commission if the property is expensive. Some listing agents are even willing to charge only 1% of the property’s value, but their services may be less than other real estate agents.
Anytime that you are checking real estate agent fees, you should confirm the range of the services that the agent will provide. If you are looking to save money during the selling process, you can search for agents with lower real estate commission
Standard seller’s agent commission for different areas in BC:
Seller’s agent commission in Greater Vancouver Area: 3.875% on the first $100,000 and 1.3375% on the remaining total.
Seller’s agent commission in Fraser Valley Area: 3.78% on the first $100,000 and 1.35% on the remaining total.
Seller’s agent commission in Victoria Area: 3% on the first $100,000 and 1.5% on the remaining total.
Seller’s agent commission in Kelowna: 3.5% on the first $100,000 and 1.75% on the remaining total.
The seller of the home will usually pay the real estate agent commission. When a home is listed, the seller will decide on the gross commission they are willing to pay and how it will be split between the buyer and seller agents. This commission will then be paid out by lawyers after the transaction has been completed.
Typically, the seller will cover both the commission for both agents. In rare cases, if the seller lists the property by themselves or chooses not to give a buyer agent commission, the buyer may have to pay their agent the difference. However, such cases are rare and real estate agents will generally let you know beforehand if it is the case.
Real estate agent commissions are high because the commission is split between many different parties and the real estate agent has to cover any marketing expenses even if the home doesn’t sell. The agent may have to pay upfront for professional photography, mail marketing materials, supplies, and much more. Your agent works very hard behind the scenes to ensure that you are getting the best price for your property and in some cases, a higher commission can mean better marketing for your home.
There is no formal rule or regulation that sets the commission rate. Each agent can choose their own commission type and rate or fee. Although the commission will vary from agent to agent, it will be close to the average commission for the area. Real estate commissions are negotiable. Details about your agent’s commission will be outlined in the contract you sign when hiring an agent.
Yes! Like most other service fees, you can negotiate the commission with your agent. The commission makes up the largest portion of your selling costs, so it always makes sense to check and negotiate the commission of different real estate agents when selling a property. On WOWA, you can check real estate agent commissions.
Flat-fee commissions can seem like a great way to save money, especially since they are usually cheaper than equivalent percentage-based commissions. However, the quality and quantity of services offered with flat-fee packages are often much lower. You may have to stage and market the home yourself, and you will still have to pay a buyer’s agent commission.
Yes. Real estate agent commission is paid only when the property is sold, even if the property has been listed for a long time. In addition, some sellers may choose to self-list their properties and not offer a commission to buyer agents. We do not recommend this as doing so could reduce the likelihood of your property being sold.
A double-ended deal is when one agent represents both the seller and the buyer. In this case, the agent will get the full amount of the commission. This can happen if the buyer directly contacts and works with the seller’s agent after finding the listing without consulting an agent of their own. However, this is not recommended due to potential conflicts of interest. Agents are required to tell you in advance if they are double-ending a commission.
There are many additional closing costs involved in selling a home including lawyer fees, penalties from closing out a mortgage too early, as well as legal fees.