Who Pays Realtor Fees in BC?

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Buying a home can often get complicated and expensive quickly. Most people don't realize how many hidden costs are included in purchasing a home, such as a home inspection, down payment, real estate commissions, taxes, mortgage fees, and more.
It is easy to get overwhelmed even before you buy a piece of Invermere real estate, which is one good reason to hire a real estate agent to represent your best interests and take care of fiduciary tasks. They will walk you through the process step by step, whether you are the buyer or the seller, and ensure that you pay the best price along the way.
Some people attempt to cut corners by representing themselves when listing BC lake front property for sale, but most buyers and sellers don't realize the cost is unavoidable. The seller pays commission 100% of the time and must pay the buyer's real estate fees.
With this in mind, the buyer has nothing to lose by choosing an agent who is a good negotiator to help them out, and the seller ought to have an agent to represent their best interest.Keep reading to learn a little bit more about how all the parties involved get paid and what you can expect if you enter the real estate market, either as a seller or a buyer.

How is a Real Estate Agent Commission Paid?

buyer’s realtor and buyer shaking hands while exchanging house key]
In simple terms, the seller pays all real estate agent commissions. They are responsible for paying both the seller and buyers agents when the property closes. Some people argue that this is included in the costs of a sale, but either way you want to look at it, the seller needs to be prepared to give up some of their profit to an experienced realtor.
While the buyer will notice a lot of fees as part of their closing paperwork, they will never see that buyers pay realtor fees. In the Canadian market, this is simply how the legal fee structure works from discount brokerages to top agents.
Real estate agents do not receive their commission until the closing paperwork is signed and filed whether they are the seller or the buyer. Therefore, the buyer's agent has extra motivation to close a home sale after negotiating effectively because the sale needs to close for them to receive a buyer agent commission. If the sale falls apart, then the buyer agent does not receive payment.

Who Decides the Real Estate Agent Fees?

Most real estate professionals charge a fee of 3-7% of the purchase price of a home. This price is agreed upon by the seller and the seller's agent and cannot be changed by the buyer's agent later in the process.
Technically, if all parties involved, including the buyer, seller, buyer's agent, and seller's agent, agreed and signed paperwork, the fee could be altered, but this almost never happens. Instead, it is fairly common for the buyer's agent to accept the rate set by the seller when it comes to commission and Windermere homes for sale.
While 3-7% seems low, it is based on the purchase price of a home, so commissions can be lucrative at times, depending on the price of the property involved in the transaction. Not everyone is pleased with the fee structure, but as a seller based fee, no one else has a say in the matter.

Do Buyers Pay Realtor Fees?

As previously mentioned, buyers do not pay realtor fees. Anyone that tells you buyers pay realtor fees either does not understand the Canadian marketplace or is attempting to pull the wool over your eyes. The buyer should never find a charge for his agent within the paperwork.Some people argue that the buyer pays realtor fees as part of the total price of the property, but in terms of legal paperwork, this is not the case. These same people will argue that the price of a home needs to be negotiated by the involved parties and many agents to include an acceptable commission.
At the end of the day, however, the closing sale commission comes from the seller, not the buyer. The real estate agent does not receive their commission directly either. Instead, the commissions are taken (or adjusted) from the profits that are made from the sale and sent to the real estate brokerage that represents the seller. The seller's realtor is then paid from the brokerage, which will also disperse firms to the seller's agents.

How Does the Final Selling Price Affect Realtor Fees?

As mentioned, real estate agent fees tend to range between 3-7%. This price is the same for the seller and the buyer's agent commission. The listing agent tends to set the price because they are responsible for paying the listing fees.
The seller's lawyer and/or agent will consider these factors when deciding what to price a property at before issuing the listing contract. Once the listing contract is finalized and signed, the fee will not be changed regardless of what the home is sold for. Therefore, sellers usually leave room for some negotiation in this area.

Can One Agent Represent Buy the Buyer and the Seller?

Sometimes people think that they can save the money realtors charge by hiring the same agent to represent the buyer and the seller. However, this is actually not legal in Canada. 
To ensure that the seller and buyer are each properly represented and receive the right price, it is legally spelled out that two separate agents must be used so that everyone receives the representation they are legally entitled to. While it may cost slightly more money, this system protects both sides of the transaction.
If you are looking for a BC realtor who will negotiate effectively on your behalf, contact Team Rice today!