What are Popular Myths About Comox Valley Real Estate Fees?

What are Popular Myths About Comox Valley Real Estate Fees?

Popular myths about Comox Valley Real Estate Fees are plentiful. Here are  a few:

Why list with a Comox Valley real estate company when they charge so much to sell my Comox Valley home?

This is a very good question. Like any other service based business, Comox Valley real estate companies and the Comox Valley real estate agent must provide value to the people who pay for their services if they wish to stay in business. They deal with a wide variety of Comox Valley property and Comox Valley clients. Some services they provide are taken for granted. For example, when a Comox Valley buyer searches real estate listings on the Comox Valley Multiple Listing Service or real estate website, few consider who had to pay for and maintain the systems. The Comox Valley realtor often pays quite a bit to do so.

To answer this question completely, I will discuss the following:

  • who pays real estate fees?
  • who receives the commission?
  • who provides the services?
  • what costs do real estate agents incur to provide services?
  • what services do real estate agents provide?
  • the end result

Who Pays Real Estate Fees?

When a person who wishes to sell their Comox Valley home lists the home for sale with a Comox Valley realtor, the home seller agrees to pay a fee to the listing brokerage (the real estate company through which the real estate agent is licensed to practice). This real estate fee is called a gross commission in a Multiple Listing Contract. A gross commission is paid on the sale price of the home when the sale of the home completes. If the home is not sold during the term of the agreed listing contract, nothing is paid to the listing Comox Valley real estate agency for the real estate services that were rendered to the seller by the brokerage and the agent. When there is a completed sale, the gross commission (represented by the blue circle in the figure below) is paid to a number of parties.

Who Receives the Commission?

Generally, listing brokerages offer a portion of the gross commission to the cooperating brokerage that finds a buyer for the Comox Valley home or property that is listed for sale. This is generally one half of the gross commission. In this circumstance, the listing brokerage receives the other half. From this half, they must pay out any referral fees that may be applicable to the sale. They then deduct their own brokerage fees in accordance with the contract that they have with the Comox Valley realtor. It is important to realize that the brokerage maintains office staff who provide services such as reception, sending the listing to the real estate board, maintaining the financial books, ensuring that lawyer and/or notaries who are involved in the sale get the contracts and other documents that they need, receiving and being responsible for deposits paid, and a number of other things. The brokerage also maintains a facility to accommodate agents and clients.

After the agency portions of the Comox Valley real estate commission are removed the realtor receives the remainder. From this remainder, the agent must pay their business expenses and income taxes leaving what is left as the net pay to the individual agent. What starts out seemingly as a large amount of money can become a lot smaller by the time the agent receives their share as net pay.

Who Provides the Real Estate Services?

While the Comox Valley realty (brokerage) does provide services, the real estate agent must provide most of the services to the seller and/or buyer. The type and number of services provided, along with the timing and timeliness of these services varies with each individual real estate agent. As a Designated Agent in British Columbia, the real estate agent works for you and protects your interests. They take courses such as Legal Updates to do just that through such things as the writing of legally enforceable contracts specific to the situation and circumstances of the purchase or sale.

What Costs do Real Estate Agents Incur to Provide Property Services?

Some of the costs incurred by real estate agents are standard and they apply to every agent. These are paid by the agent and include, but are not limited to, expenses related to:

  • Real estate Licensing courses and exams to become licensed as a real estate agent
  • Re-licensing fees every two years required to maintain a real estate license
  • Post-licensing courses required to meet minimum professional development requirements
  • Canadian Real Estate Association Fees
  • British Columbia Real Estate Association Fees
  • Local Board Fees
  • MLS ® Access Fees
  • System technical Fees
  • Agency Dues and Fees (Corporate, regional and local)
  • Agency training courses
  • Continuing Education Courses such as Legal Update Courses
  • Document Search Fees (titles, strata, registry, etc)
  • Signs and Frames
  • Real Estate Lock boxes
  • Real Estate Lock box electronic opening devices

Many real estate expenses will vary by agent and according to the type and nature of the services that they provide. They can include, but are not limited to, expenses related to:

  • Real estate marketing (print, online, radio and perhaps TV in large market areas)
  • Real estate advertising (print, online)
  • Office Equipment (computer, laser printer, scanner, fax machine, etc.) and Supplies (paper, envelopes, file folders, real estate forms, laser ink, etc.)
  • Professional Equipment (Video equipment, Video Steddiepod, photographic equipment, camera tripod, etc.) needed to take video, audio and photos to market the home)
  • Video and Photo Editing Equipment / Software
  • A variety of software programs (scanning, publishing, etc.)
  • Mobile Electronic Equipment (smart phone, tablet and laptop for mobile operations)
  • Real estate website (creation and ongoing maintenance and hosting)
  • Website Search Engine Optimization and added Website Features and Functionality
  • Content Management System and Client Database
  • Vehicle expenses

What Services do Real Estate Agents Provide?

Some agents provide full-time, full-service Comox Valley real estate services while others do not. What is meant by full-time, full-service also varies amongst different real estate agents. For example, does full-time mean 9-5 Monday to Friday? Does it include work outside of these hours? How much? How often? What is meant by full service? Does the listing agent put a sign on the lawn, place an ad in the local newspaper, add the listing to MLS ® and hope someone finds a buyer for their listing through a Comox Valley MLS search? Or, do they do much more? As a real estate client myself on many occasions; some agents did very little and were useless, while a few did a lot and were effective in selling my home.

The End Result

At the end of the day, the cost of real estate services should be measured against the type, nature and the quality of the services provided and the result – your home SOLD. When measured against these metrics, the age old adage You Get What You Pay For is generally true. Is your measure one of real estate cost or value?

As a real estate agent and business owner, I have significant expenses each and every month. Major professional expenses include those to maintain my professional qualifications and current knowledge, and those related to effectively marketing and successfully selling homes. My other business expenses are numerous and varied. Expenses to maintain the website that hosts the blog you are reading represent a small portion of my monthly expenses. While I am pleased to provide this and other types of information to help people who have questions about real estate, I only provide real estate services to clients. Like any other business owner, I cannot stay in business if I provide professional services for free.

Why list with a real estate company when they charge so much to sell my home?

Thinking about selling your Comox Valley home yourself? What are the consequences when something goes really wrong? Who is there to help? What are the most important questions and considerations? If you are thinking of selling your Comox Valley home contact Brett Cairns of RE/MAX Ocean Pacific Realty.