The Truth About Calgary Real Estate Commissions and For Sale By Owners

All prices you see quoted in the news media concerning home prices include Real Estate Fees. Those quoted prices are the Gross Prices a home sold for. The Net Price is what the home sold for less Real Estate Commissions. Typical Calgary Real Estate Fees are 7% on the first $100,000 and 3% on the Balance of the Gross Sale Price. Real Estate Commissions are paid from the sale proceeds.

As An example:

Looking at the sale of a home this way it is easy to see why some sellers choose a strategy to sell the home themselves. For Sale By Owner (FSBO's) do the math and quickly decide that they should pay themselves the Real Estate Fees. I am a Realtor and when I look at it like this, I agree. Why should I pay a Realtor when I can pay myself?

What usually happens with For Sale By Owners is the home buyers not working with a Realtor do the same math to. The buyers deduct what they think Real Estate Commissions will be and that is the offer. Therefore, in the end most For Sale By Owners (if they sell) sell for close to the same NET PRICE or lower than they would have received had they used the services of organized Professional Real Estate. Which is fair. If there are no Real Estate Companies involved, there should be no Fees or Commissions to pay.

So if it's that easy why use a Professional Realtor? Because it's not that easy!

More than a third of all MLS listings expire unsold. Professional Realtors with all their skills, resources, time and money are not able to sell 1/3 of the new listings first time out. Many of these homes come back on the market at prices that buyers are willing to pay and do eventually sell.

If 1/3rd of homes marketed by Professional Real Estate do not sell first time around, I would imagine the % is much higher for FSBO's. For Sale By Owners do not have the resources or experience to expose the home to all the Currently Active Qualified Home Buyers in the market today. Realtors do!

In fact Professional Realtors will not show a house unless they know for certain, if that is the right house an offer would be written up and bank financing is already arranged. There is no worse waste of time than showing homes to people who can't buy one to if they wanted to. However, it happens to new Realtors and FSBO's all the time.

Real Estate Commissions are negotiable. And because Real Estate Fees are negotiable, aside from the typical 7 & 3 there are all kinds of other options out there. The old adage of "You Get What You Pay For" is as relevant today as when it was first spoken. You still cannot buy a Cadillac for the price of a Volkswagen. You cannot buy a home in Mount Royal for the average price of a home in Haysboro, not going to happen.

So I encourage you to research all your options before you decide to sell your home. 

Calgary Condo Math Made Easy

4 Easy Questions will help you put your condo financial situation in perspective.

• What is Your Current Condo Fee?
• What is the Total Of All Condo Fees?
• What are the Total Operating Expenses?
• How much Cash on Hand does the Condo Board Have?

The answers to these questions will tell you:

• What Percentage of The Total Condo Fees does your unit represent?
• What is the percentage split between Condo Fees for the Reserve Fund and Operating Expenses?
• How much Cash is on hand for your unit
• Easily calculate how any Special Assessment would affect your unit.

Analyzing these numbers will lead to a few more questions.

• Does my condo fee seem reasonable for what I'm receiving?
• Does the percentage split between expenses and reserve funding seem okay?
• Does the current cash on hand per my unit seem reasonable?
• Will there be enough money for future major repairs?

Here is the results from an Actual Condo Building near Chinook Shopping Center with 26 Total Units.

Everything good and bad that happens in this building including Special Assessments

- This unit is on the hook for 4.28%

Copyright© Jerry Charlton 403 831 0842 Jerry@JerryCharlton.com