Did Vancouver find the key to eliminating FSBOs?

by Olivia D'Orazio10 Apr 2015
Agents in one market say they’ve hit a winning formula that keeps FSBO competitors at bay, if not cutting them out altogether. But is the remedy worse than the disease?
“In Vancouver, being a larger urban centre and with the demographics, (clients) don’t want to do a for-sale-by-owner,” says Brad Gannon, a sales rep in Vancouver. “There are very few FSBO organizations.
“I have friends who live in places where total commissions are four, five, six per cent of the sale, so it might be a little bit different (there).”
And, indeed, they are different. Of course, commissions are entirely negotiable so no standard exists, but the usual commission is between five and six per cent. In Canada’s Western cities, however, it’s more common for agents to take, say, a seven per cent commission on the first $100,000 of the sale, and a one or two per cent commission on the remaining amount.
“I’m not sure whether it’s correlated or not, but I heard the average commission in Vancouver is one of the lowest in North America,” says Matt France, a Vancouver-based agent. “Is that because Ontario holds some of the information (closer) than we do? That could be possible.”
The market in Vancouver, however, is significantly more expensive than in many other cities across the country, putting commission rates into perspective for some buyers and sellers (see below for a comparative chart).
“The Realtor’s fees as a percentage don’t seem that outrageous to people,” Gannon says. “People don’t really see the services of a Realtor as just being access to data. It’s a salesperson, a mediator, a negotiator, the CMA from sold data. I don’t even think (the commission rate) enters people’s minds too much.”

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