Michael La Prairie, owner of Century 21 In Town Realty said there is no city-wide set commission rate
Fiona Anderson, Vancouver Sun
Published: Friday, April 21, 2006
With the real estate market showing no signs of slowing down, and buyers snapping up properties as soon as they are listed, one thing that shouldn't be rushed is picking a realtor.
The relationship between a buyer or seller and a real estate agent is a pretty serious one, especially in this overheated market where buying time is compressed, Real Estate Board of Greater Vancouver director Dave Watt said.
The Greater Vancouver area -- which stretches from Whistler to Tsawwassen and Maple Ridge -- has 8,000 realtors and there are more than 17,000 in the province so there are a lot to choose from..
"Trust me, you'll find one that you'll like," Watt said.
Provided, that is, that you take your time.
The best way to find a realtor is through recommendations, Watt said. Ask friends, ask family, and interview realtors. Ask for references from past clients. And most importantly, ask them questions to see how well they know the local market, he said.
"Not only do [realtors] have geographical areas that we specialize in, we typically specialize in a type of housing, maybe it's condominiums, maybe it's detached housing, maybe it's working with new housing," Watt said.
Make sure the realtor has the specialty you need, he stresses.
If no one can recommend a good realtor or you are new to town, drive around the neighborhood you are hoping to buy in, and check out "For Sale" signs, Watt said. If there is an agent that has a lot of signs, he probably knows that local market.
Open houses are also a way to meet realtors, and you can do it anonymously, Watt said.
"See if you feel they know the local market and just get a sense if you can work with that person," he said.
A potential buyer or seller can also find names on the Internet but Watt wouldn't recommend that.
"I'd be careful that they don't just have a good website," he said.
Besides ensuring the agent knows the local market, a seller should also ask a potential agent what commission the agent will charge and what he will be doing to earn that commission. The board sets no rules about commissions, so it's completely up to the selling agent who then shares the commission with the buyer's agent, Watt said. Watt recommends interviewing at least three agents to find out what they will charge and what services they will provide.
And don't be afraid to fire the realtor if he is not living up to his promise, he said.
Michael La Prairie, owner of Century 21 In Town Realty in downtown Vancouver said there is no city-wide set commission rate but there is a standard rate his realtors aim for. That rate charges seven per cent on the first $100,000 of the sale price and between 2.5 and three per cent on everything above that.
"There are companies that charge less but you don't get as much service and professionalism," La Prairie said.
La Prairie's 80 agents will take 52 per cent of the commission on properties they've listed with the remaining 48 per cent going to the buyer's agent, he said.
Although the rate is not set in stone, La Prairie said that his agents would never stray from the standard rate, unless there were very special circumstances, such as selling a property for a family member.
Elton Ash, regional executive vice-president with Re/Max Western Canada, said there is no set commission rate that Re/Max realtors must charge in B.C. But individual offices may set rates for their agents.
Les Twarog, a realtor with Re/Max Crest (Westside) Realty said his office charges seven per cent on the first $100,000 and three per cent after that, much like Century 21. That rate may be negotiable in special circumstances, such as for repeat customers, Twarog said.
David Langlois, a realtor with One Percent Realty in Squamish charges a set commission of $5,000 up to $500,000 and then a one-per-cent commission for any amount above that. He adds fees on top of that, which amount to $965, including GST, for a sale price of $500,000.
Paying any more than that doesn't make sense in this kind of market, Langlois said.
"Just because your house is worth twice as much as it was when you bought it, why should the realtor benefit from that?" Langlois asked.
In fact, in a hot market, the realtor's job is actually easier, another reason commissions should be lower, he said.
Langlois has been a member of the Real Estate Board Greater Vancouver's medallion club for the last two years which, according to board president Rick Valouche, recognizes the area's top realtors, based on a combination of units sold and value of sales.
"[Medallion club realtors] have shown to the public that they take time and effort to work with their clients to best buy a property or list a property at fair value," Valouche said.
A medallion club member can use the board's medallion symbol on his cards, Valouche said. And generally the same names appear on the list year after year, he said.
So checking for a medallion symbol may be another way potential buyers and sellers can evaluate a realtor.
People can also check out the Real Estate Council of B.C.'s website which lists all licensed realtors. The council, which is responsible for licensing and regulating realtors, also lists all disciplinary decisions involving licensees since 2004, a good thing to check out to determine whether an agent has had complaints made against him in the past.
Tony Schollen and his wife have decided against using a realtor to sell their house in Maple Ridge and instead have have listed their home on www.bchomesforsale.com.
The couple want to save money and they prefer talking directly to a potential buyer, Schollen said. He determined the asking price by checking out listings on the internet, reading newspaper ads and going to open houses.
The Schollens have had one offer since they listed the property two weeks ago and lots of interest. And ultimately they are still undecided whether they want to sell. But with the website costing $90, and an ad in the Buy and Sell being a couple of bucks, it's not going "to break us if we do change our minds," Schollen said.
But Langlois recommends sellers use a realtor because realtors know the process and know how to sell.
"That's why we exist," he said.
Using a realtor gives the seller access to the multiple listing service and www.realtylink.org, operated by the Real Estate Board of Greater Vancouver.
"You get more exposure [and] exposure is what sells a place," Langlois said.