Who Pays The Real Estate Commission & Fees?

Follow the money and you get your answer. Lots of Realtors tell you the Seller pays the fees. Which is kind of true. But where do the sellers get the money to pay the fees and commissions? From the Buyer!

That's correct the Buyer pays 100% of all fees and commissions to the home seller as part of the total purchase price of the home.

Once the seller's lawyer has the money, the lawyer divides it up between the seller, the lawyer and the real estate brokerages.

In Calgary, it's very common to see listing agents charge home sellers 7% on the first $100,000 and 3% on the balance of the sale price. Then the listing agent offers 50% of that to a Buyers agent that brings a buyer into the deal.

Here's an example on a $650,000 sale of a home. $23,500 plus GST would come off the top. Leaving the home seller with $626,500.

The Real Estate Commission and Fees would be split between the Buyer's Realtor and the Seller's Realtor - $11,750ea.

The sellers Realtor would deduct all the marketing expenses and broker fees from their $11,750 and pay tax on whatever is left.

The buyers Realtor has no marketing expenses but has broker fees and taxes to pay on their $11,750.

Do You Need a Realtor To Buy or Sell A Home in Calgary? I say no, not really. All the information you need is on the internet.

What's not on the internet for you is My Real Estate & Business Experience!

Everything about everything is now on the internet. What cannot be put on the internet is the hands-on actual experience a person gets through years of doing. Doing and Learning. Learning and Doing it Better and Better.

The value I bring is My Experience. Whenever I have a gut feeling something is not quite right, I'm rarely wrong and save my clients from an unpleasant situations.

Calgary Realtors® must use the Residential Measurement Standard (RMS) when measuring residential properties. This measurement standard helps consumers easily and accurately compare different types of residential properties. This guide will help consumers understand the RMS, and how Alberta real estate professionals use it. Your real estate professional has a responsibility to ensure you understand the RMS and its implications and is required to discuss it with you. This discussion will help you make informed decisions about the size and suitability of properties.

Some Key Definitions

Grade: Grade is the level of the ground around the exterior of a residence. The grade can be horizontal, sloped, or a combination of both. In Alberta, most residential properties contain above-grade and below-grade areas.

Levels: Levels are areas of the residence that are in the same horizontal plane. A level must meet the minimum ceiling height requirement [2.13 metres (7 feet)] to be included in the RMS calculation.

Above Grade Levels: Above grade levels are the levels of a residence that are entirely above grade. The RMS area of a residence is the sum of its above-grade floor levels.

Below Grade Levels: Below grade levels are the floor levels of a residence that are partly or fully below grade. If any portion of the level is below grade, the entire level is below grade. Below-grade spaces include lower levels and basements. Below-grade levels are not included in the RMS area. Examples of residential styles with lower levels include raised bungalows, bi-levels, split levels, and properties with walkout or walk-up basements.

The RMS contains nine principles that real estate professionals must follow when measuring the size of a residential property:

1. Real estate professionals must use the RMS.

When a seller wants to communicate the size of their residence to potential buyers, or a buyer wants to measure a residence they’re considering, their real estate professional must communicate the RMS area. Real estate professionals are allowed to hire someone to calculate the RMS area of a property, such as property measurement companies or real estate appraisers. The real estate professional must ensure the person is able to competently measure the property using the RMS. If it is not possible to measure a residence, for example, the residence is not yet built or access isn’t possible because of a difficult tenant or a difficult foreclosure, your real estate professional may deviate from measuring the property using the RMS as long as:

• The measurements represented do not imply they are in accordance with the RMS

• They include an explanation as to why the property could not be measured using the RMS

• They must apply the RMS to blueprints

• They must disclose the measurement methodology they used (i.e. area size calculated by applying the RMS to the builder’s blueprints)

2. Identify if the measurement system is metric or imperial, and apply it consistently. Measurements must be calculated to within 2% of the RMS size.

Real estate professionals must indicate what measurement system they used to take property measurements (metric or imperial), and they must take all measurements for a particular property using the same system. The real estate professional must talk to about which measurement system is appropriate. In a lot of cases, a key factor in deciding which measurement system to use is which measurement system the real estate professional’s listing service or property database uses.
While the RMS provides a 2% tolerance, real estate professionals must attempt to measure the property accurately.

see the guide below for the complete RMS Guide