toyer1

Hi All,

Looking for a bit of advice again. When I finally move to Calgary and look to buy a house, what are the associated costs involved ie searches/surveys etc. And who pays the realtor ,and is his/her fee a percentage of the house price or fixed. Does the seller pay or the buyer or both?

Thanks in advance.

Rich_007

Sent you a PM with some relevant info.

Rich.

toyer1

Thanks for the info. Any advice on Realtor costs. Already paid 4200 GBP to the robbing b****s estate agents over here for doing nothing to sell my house lol.

iaink

As a buyer there are no realtor costs, it all goes to the lucky seller.

There are of course the usual gammut of taxes, land registry searches and legal fees, but on the whole they are a lot more reasonable than in the UK.

IIRC the total cost when I bought my place 4 or 5 years ago were less than $600.

toyer1

So the same as in England. Thank god for that. Thanks for the info

jcexit

Buyers in Ontario don't usually pay Realtors when purchasing a property. The commission is paid by the seller to the listing brokerage who then sends (usually) 50% to the buyer brokerage. There are some circumstances when buyers do pay their Realtor, but this should not be the case with you.

The commission may be a negotiated set amount or a percentage of the sale price. Percentages in the GTA are around 5% but there is no law or rule that sets this figure.

Closing costs can be substantial: again around here solicitor's fees and disbursements (which include a Search Fee or Title Insurance) will be around $1200 and includes the 7% GST (Goods and Services Tax).

Land Transfer fees in Ontario are charged at the following rates for residential property:
up to first $55,000 = .5%
remaining amount to $250,000 = 1.0%
remaining amount to $400,000 = 1.5%
Any amount over $400,000 = 2%
(No GST on Land Transfer fees)

You may find you have to pay returnable deposits of around $200-$250 with each of the utilities: Electric, Gas, Telephone line - also a lesser deposit for satellite and cable tv. Other closing costs include movers.

Iaink, how did you get away with only $600? That would only cover the solicitor's fees before disbursements around here!

WorldWeary

The commission is agreed by the seller with his agent. It is paid out to the seller's agent from the purchase price. Who paid it? Answer: The buyer obviously. Just the same as in the UK. The money came out of the buyer's pocket not the seller's.

Thinking the seller paid is just fooling yourself. The money is in the purchase price. The only difference I see is the agents generally do earn their money in Canada. They SELL your property as in convince someone to buy. Unlike the UK where all they really do generally speaking is LIST your property and leave it to you to sell it to a buyer.

Someone selling really has no reason to ever worry about the % commission. Anyone buying does, that's why the rate is negotiated with the seller, not the buyer. Agents aren't dumb!

CalgaryBlade

We have been able to write-off the UK agent's fees, and moving costs against our Canadian income taxes.

It sweetened the pill somewhat.

CalgaryBlade

Mmm, that's a philosophical point. It could be viewed as coming out of the seller's "profit", as opposed to the buyer's pocket.

When we bought our house last year, we offered a figure that we thought reasonable for the property (about 97% of the asking) and it was accepted. We got the house we wanted for a price we wanted so we didn't feel we paid the commission. The agent got paid out of what we paid the vendor, but in effect it was money that was held back from the vendor.

Either way it's a moot point for us as we now have a house with a market value of around 25% more than what we paid

I do object to the realtor cartels that operate here. i.e. the your buying agent is much keener to show your properties which are on sale with their own office.

Cowtown

Didnt you say you had a Canadian spouse?

This option is not available to the 'normal' couple from overseas where neither of them are Canadian.

dbd33

Trying to transfer the ownership of a house in Ontario without a lawyer is an adventure. Last year I wandered into the land registry, said what I wanted to do and they said I had to buy a software package to do it. The software was a couple of grand so, in the end, I caved and a paid a shyster to do it. He quoted $150 but, as always with lawyers, there was a catch; he billed me $150 for each half of the transaction.

iaink

Fortunately I dont live around there

$600 was my optimistic memory. Total legal fees back in 2001 ~$800, consisting of:

$650 professional fees
$66 taxable disbursments
$50 GST
$30 exempt disbursments


Additonal expenses:
$22 Min of Finance sherrifs cert
$168 title search
$ 908 Min of Finance land transfer taxes

Dont ask me why the title search isnt included in the legal fees, I gues sit wasnt actually done by the lawyer?

CalgaryBlade

I did say that, although I never said I was Canadian

We share the tax credit though.

Mmm, 6 month spousal sponsorship, tax credits ... they are well worth the trouble these Canuck chicks

WorldWeary

You're right CalgaryBlade it is a philosophical point to a degree. The way I look at it is, who's pocket did the money actually come from? In the end every dollar came out of the buyer's pocket. That also includes all fees either party has to pay. The mistake (in my opinion) that many people make is in thinking that the price they sell for is THEIR money. It isn't, it's the buyer's money.

Or take a simple example. You buy a car. The dealership pays the salesman a commission. Where did the money come from to pay his commission? So who paid the commission? There's no difference between a house and a TV really. The buyer pays for everything, it's just a question of who's hands the money goes through.

Re 'cartels', I think you are taking a narrow view of that. Naturally your agent will want to show you properties that either he or his office has listed since they would not then have to split the commission. That assumes of course that they have any that fit your criteria. But the fundamental differences between agents in Canada and the UK lie in 2 areas.


1. Your agent works for YOU. Generally the buyer has an agent and the seller has an agent. Their loyalty is clear cut. In the UK, basically every agent works for the seller. The buyer is on his/her own.

2. Your agent can show you every house in Canada if you want. That is what MLS is all about. In the UK, an agent can ONLY show you their own listings. So you have to go around to various Estate Agents to see what properties they have and you are always being shown them by seller's agent. You don't have an agent!

I think it is pretty obvious which is a better system for the buyer.