Calgary Realtor fees - Jesse Davies Top YYC Realtor

How much do realtors charge in Calgary? Realtor fees in Canada vary from province to province. The model in Calgary is different from that of other provinces and the need to outline these fees is of the essence for any Buyer or Seller in the Calgary Real Estate market.

Before starting your search for a Calgary realtor, it is imperative that you understand everything about realtor fees in Calgary. When working with a realtor, there are certain fees and commissions you need to know about. The question we usually ask is “How much do you pay a realtor when selling your home?” As much as we would like to tell you that there is a set amount or a certain way to go about this, there isn’t. The answer is much more complicated than you might expect. However, we will do our best to explain these fees in the best way possible.

Real estate fees differ among realtors i.e. each realtor has a different fee he or she charges and the services he or she provides for the said fees. There are no set fees for realtor services in Calgary.

Before we get into this, there are some things we need to make you aware of. Lots of sellers make the mistake of comparing one realtor to another based on their fees. This is a mistake you shouldn’t make, as every realtor is different in terms of the services they provide and the fee that corresponds with this. There are situations where you prefer a particular thing not because it costs less but because it suits your taste. This is the same thing with realtors. Each realtor has unique talents that appeal to some sellers and don’t appeal to others. Some realtors provide extensive marketing services and spend advertising dollars to get as many eyes on your property as possible. Some realtors focus on video tours, HDR photos, 3 D tours and professional print marketing material.  What you need to do is to carry out extensive research on the services you will get for paying the fees set by the realtor and compare them and decide what suits your budget and needs.

Every realtor in Calgary is associated with a brokerage. For this reason, commissions are paid to the selling agent’s brokerage. You should never pay any commission directly to a realtor. After receiving payment from the seller, the selling brokerage then makes the required payment to the buying brokerage who will represent the buyers who eventually purchase your home. Both the selling and the buying brokerages deduct commissions and administration fees before paying the respective representing agents.

Is there any such thing as Average Realtor Fees in Calgary?

There is no such thing as average fees for realtors in Calgary. The amount you pay typically depends on the services the realtor is providing to the home seller and these commissions are negotiable. There is a general rule people consider when talking about Calgary realtor fees – “the more work you do as the home seller, the lesser the commission you pay”. You should discuss the fees and load of work upfront before signing any paperwork. Clearly outline what you need and how much you are willing to take on yourself and see if this aligns with the fees being charged.

In Calgary, the payment terms for both buying and selling must be written down. There are two documents that buyers and sellers must sign in accordance with these payment terms – the listing contract and the service agreement.

What is a Listing Contract?

This is a document the seller must sign. The listing contract clearly states the commissions to be paid to the selling agent. However, these commissions will be paid to the brokerage of the selling agent who then forwards the payment to the selling agent. The listing contract also indicates the commission paid to the buying agent via the buying brokerage.

What is a Service Agreement?

This is another important document you need to be aware of. The service agreement is a document every buyer must sign. It is also known as a buyer brokerage agreement and it was made mandatory since July 2014. The service agreement clearly states the duties of the brokerage and the buying agent. It aims to clarify these duties as wells as the fees to the buyer. This document goes a long way to help the buyer understand the charges set by the buying agent.

There are situations in which sellers don’t pay full commission. Property buyers should understand what happens when the seller fails to offer the full commission to the buying agent. We will explain in detail what happens in such a scenario in the succeeding paragraphs.
First and foremost, the buyer must pay the buying agent for the shortfall in commission. The buyer is well within his/her rights to demand the shortfall from the seller and include this as a clause in the purchase contract. The difference will then be covered by the buying realtor. Buyers should ensure they understand the intention of their buying agents in scenarios where there is a shortfall. There are cases in which buying agents choose not to display the properties of sellers who fail to pay the complete commission. You should call the selling agent before the showing to inquire about the willingness of the seller to pay the full commissions. In some cases, agents make that call before bidding for that property. Whatever the case, the buyer should always be informed of cases where the sellers offer a lower commission than the charges set by the buying agent. You as the buyer should know this well ahead of time.

Detailed Explanation of Calgary Realtor Fees

The structure of realtor fees in Calgary is somewhat complicated when compared to other provinces in Canada. You will come across cases when the fees are split between the first installment and the sale prices. There are other cases where a one-time flat fee percentage is charged on the property’s final sale price.

Let’s break this down for you.

We will take the example of a home valued at $600,000. With the split fee structure, the fees will be split as a certain percentage of the first $200,000 and another percentage on the remainder of the sale price balance.  To further simplify these calculations, we will calculate these fees using random percentages. Consider the seller charges 6% on the first split i.e. fee on the first payment and 4% on the second payment.

The fees will be calculated as follows:

$200,000 x 6% = $12,000

$400,000 x 4% = $16,000

This amounts to a total fee of $28,000 + Goods and Service Tax A percentage of this fee is given to the buyer’s realtor. Like we mentioned above, there is no average realtor fee in Calgary. Usually, the realtor representing the buyer gets half of the total commission.

Here’s how it pans out:

From our example above, the total fee was $28,000.


Seller Realtor’s Commission = $14,000 + Goods and Service Tax

Buyer Realtor’s Commission = $14,000 + Goods and Service Tax. The above example is for the split fee structure. With the one-time flat fee structure, the selling realtor charges a one-time fee on the sale price. This fee is also split between the buyer’s realtor and the seller’s realtor.

The above calculator is the most ideal realtor fee scenario. However, the selling agent may present other scenarios that we will discuss in the paragraphs below.

In the first scenario, the realtor may decide to reduce the fees after you successfully negotiate with them. The agent in charge of such a deal might not be experienced.  Why will you use an agent who reduces his/her fee after a negotiation? What stops them from negotiating a poor deal on your behalf? However, some agents are good negotiators. You just need to search extensively.

The realtor might reduce the commission because he or she is a part-time agent. They have a full-time job and decided to go into this line of business as an additional source of income.

In some situations, the agent cuts the fees because he/she is desperate for a paycheck. You should never consider these types of agents. This is because the agent is more focused on securing a pay-cheque. In the end, he/she might neglect your interest.

In some cases, you may be required to pay a flat fee regardless of the amount the house sells for. You might also be charged a fixed percentage on the sale of the home i.e. the realtor may decide to charge you 7% on the sale price of the property. The income gotten from this percentage is then shared between the buying and the selling realtors. Another fee structure used by realtors in Calgary is the hourly structure. In this case, the realtor charges per hour.

There are also cases where sellers make use of discount brokerages, even though they don’t understand discount brokerage commissions. The commission structure discount brokerages present is such that they advertise a 1% commission for selling your property. In most cases, you still have to pay the complete 3.5/1.5% on the buying side and save a few dollars on the selling side.

Over the years, we have noticed that discounting agents tend to have a massive workload. This is because many people see them as a cheap option and hire their services. Some discount agents lack the time to respond to queries from sellers, making the process a lot more difficult. The buying realtor on the other hand charges the full commission of 3.5%/1.5%. Discount agents are also obliged to provide service agreements. Savvy buyers might attempt to strike a deal on the buying commission, disguised as a refund on buying commissions. The discount agent might be generous on both the buying and selling sides. However, several homeowners prefer selling via discount agents.

Calgary realtors are not allowed to set their charges based on the difference between the asking price and how much you finally sell the house for. This is prohibited by the Calgary Real Estate Board.

For you to make the most out of the sale of your home, it is imperative that you hire a seasoned and experienced realtor with a track record of success in this field. The realtor should have a reputable image, an impeccable portfolio, and an in-depth knowledge of the market. Even though commissions are negotiable, we advise you to pay the full commission to ensure that your property gets maximum exposure. Maximum exposure is the key to increasing the likelihood of someone seeing your home and wanting to see it which leads to them making an offer, you should prioritize this as it works most often than not. The Calgary real estate market is not as complicated as it seems. This write up should serve as a guide to realtor fees and help you secure the best deal possible.

If you have any questions or worries pertaining to these fees, do not hesitate to contact us. We are here to serve you and we will treat every query as a priority. We would love the opportunity to show you how we are different from most realtors in Calgary.

https://jdrealestatecalgary.ca/ | 403-969-2363