Real Estate Fees in Lethbridge (Commissions)
We are frequently asked about commissions, most notably “How are they structured, who pays the commission and when are they paid out?” Here is some information to help answer those questions:
- The Canadian Real Estate Association believes in the principles embodied in the Competition Act of Canada. Therefore, any REALTOR® must adhere to a Code of Conduct in which it is stated that: “Commission rates or fees members charge for services offered to the public, and the division of those fees among cooperating members, are solely the choice of those providing the service.” What this simply means is that commissions are not a “set” rate. Ask your REALTOR® to give you an idea of the range of commissions that they charge for certain areas and types of properties. Follow the link below to learn more about the Pledge of Competition of the Member Boards and Associations of the Canadian Real Estate Association.
- Commissions in Alberta are usually paid by the seller. The amount of commission paid is set out in the Seller Brokerage Agreement (also known as the Listing Contract) and can have the following structures:
- an agreed amount
- a percentage of the selling price
- a combination of the two, as long as it is an agreed amount
According to the Section 24(1)a, commission or other remuneration must NOT be “based on the difference between the price at which real estate is listed for sale and the actual sale price of it”. Click here to view the Real Estate Act
- Commissions are generally paid out by the seller’s lawyer on closing day.
- In a growing number of cases, buyers agree to pay a fee to the REALTOR® for representing them in the home purchase process. The amount is typically set out in an Exclusive Buyer Brokerage Agreement and must be agreed upon by all parties before a Purchase Contract is entered into.
Keep in mind when negotiating a commission with your REALTOR® that people usually look for three things when they spend money. They look for finest quality, the best service and the lowest investment. We believe that no REALTOR® can offer all three. In a transaction as big as the sale of your home, what are you willing to sacrifice? Fine quality? Excellent service? Or the lowest fee?
We provide excellent service and fine quality at a competitive rate. Call us today to discover the value of our services!