The idea that Vancouver real estate agents are capitalizing on their services at a time when sales are booming and commissions have never been higher has some calling for agents to ease up on compensation.
However, most don’t agree with the assertion that agents get paid too much and should drop commissions to spare their clients, despite some saying that association boards have lobbied to reduce its percentage of the property transfer tax and should do the same with commissions.
“It’s a negotiation process for a reason, and there are many ways to go about it,” said Darcy McLeod, spokesperson with the Real Estate Board of Greater Vancouver.
“Saying that the property transfer tax and our rate of commissions are and should be tied together is completely unrelated. It’s a free market and agents charge for their services, not based on the price of a home.”
His comments come following a column in the Vancouver Sun that called on Vancouver-area agents to take less commission in lieu of higher house prices.
According to a new survey conducted by Survey Sampling International, 86.3 per cent of B.C. residents who engaged in a property transaction in the past four years did so with help from an agent.
While most agents negotiate their commissions, many are paid based on a percentage of a home’s sale price, usually seven per cent of the first $100,000 and 2.5 per cent of the balance.
“The cost was not unreasonable 10 or more years ago, but, in the current market, these fees are quite absurd,” quoted in the column. “Realtors will tell you their fees are negotiable, but just try and see where you get.”
Over the last few months, a number of digital real estate services have made an impact on the market, putting agents head to head against online services that offer less commission for similar services. Services such as FeeDuck, RebateCrew, and a new Yellow Pages service is pushing the envelope and offering an alternative to sometimes-expensive commissions.
“A realtor can now earn more than the average annual income of a Canadian by selling two average-sized homes in Vancouver,” the column quoted.