minimeeze

We just bought a new home (moved in at the weekend). There was already a realtor representing the property. We used a different realtor to sell our home. We negotiated $25,000 off the asking price and chose to buy our own appliance package. Still got stung by HST though

JonboyE

Aren't you an insurance broker? I.e. someone who claims to represent the buyer but is paid by ... the seller?

happy hatter

My own experience.

I arranged to see a home with the builder at 2pm.

At noon the same day I was shown the same home by a realtor. I asked the realtor if I would be able to negotiate the exchange of white goods for stainless steel, front loading washer/dryer, front and back landscaping and yard fenced. Not a chance said realtor, at best the realtor said they felt confident about getting the white goods exchanged and sod laid to the front.

At 2pm I met the builder as arranged and got exactly what I wanted.

Just my experience.

HH

jericho

Touche

It's true, I agree. I have in fact argued that, as a professional industry, a fee should be charged, as opposed to receiving commission. I work with public sector clients (municipalities, cities, health boards, etc) where commission is largely prohibited in favour of a fee. At the small end of the scale though, eg/ personal lines, with small premiums, a fee doesnt make practical/financial sense. Clients wouldnt pay it.


The difference being however is that the insurance industry doesnt hold a monopoly over the paying public. Insurance buyers have an option.

This is not the case with realtors though.

stokesey

This is really interesting guys, thanks for the comments, seems a fair split of opinion....

I'll give it some thought, one thing for sure though I'd certainly instruct my own lawyer, this must provide added protection for the buyer.

On a $500k purchase, what would the realtor fee be?

Thanks.

dbd33

Insurance broking in Canada has the added dimension of conflict in that, for some lines of business, the broker sets the commision on a policy and that commision increases the premium. There's the same conflict as for estate agents, the customer buying a more expensive house/policy is better for the agent but the added one that the buyer paying more for the same policy is better for the agent. It's all a dubious business, business.

Sam-in-Okotoks

The commission paid by builders in Calgary to a Realtor representing the buyer on new properties is usually fixed and ranges between $1000 and $5000. If the property is posted on the MLS the commission can be anything from 3.5% on the 1st 100k and 1.5% on the balance to a flat fee of a $1000.

Almost Canadian

If you use a realtor the contract will be signed before you meet with the lawyer. You will be bound by the terms of the contract and there will be very little the lawyer can do.

Almost Canadian

I have nothing against ethical realtors but even you must accept that your knowledge of contract law is poor and the standard form contracts I suspect you use are heavily weighted in favour of the vendor. I will, of course, apologise unreservedly if you draft each contract from scratch and don't simply tinker around the edges in the standard ones.

gryphea

So,
AC

Can you give us an example of contract clauses tipped in favour of vendor?

Are you recommending we get a contract checked out by lawyer prior to signing to buy? i presume you are saying yes, but that that is not standard practice? How much dos this add to a typical lawyer's fee? In fact for information, what is a typical lawyers fee? and when is it due?

gryphea

Sam

What is the comission on a we list home not on mls?

Also, how do you know (if at all) what the comission will be on the mls homes in advance? You've given quite a spread there?

Sam-in-Okotoks

I explain the contract to the buyer and if the buyer requests it I enter a "buyers condition". The condition states the contract is to be acceptable to the buyer after being reviewed by the buyers lawyer. I will give 7 days for the review and if this condition is not waived by the buyer by 9pm on condition day the contract is void. To date I have not had any lawyer advise the buyer not waive this condition.

Sam-in-Okotoks

The commission on any for sale by owner (FSBO) is whatever the seller wants to pay. Some FSBO's pay a commission and some will not deal with a Realtor. On the MLS the commission being offered is displayed on the listing.

Almost Canadian

Unfortunately, I haven't been involved in a real estate transaction for some time and I don't have any of the contracts in my current office. You will be able to obtain one from any realtor.

If you have a look through the terms the imbalance will jump out and hit you in the face. You do not have to be a lawyer to see that, as a purchaser, your position is completely inferior to that of the vendor. What makes the system so bad is that it is the purchaser's realtor that initially "drafts" the contract (the vendor does not know the purchaser wants to make a valid offer until it is made). There is simply no justification for purchaser's realtors to use them, except for the "it's always been done this way" response.

You will be able to see the terms that you don't like and, at the time you make the offer, simply delete them. If you get a lawyer involved, they will likely want to draft the contract from scratch and this will be expensive.

If you wish to have a lawyer check over the standard form contract before you buy and explain what is good and what is bad about it that may be sufficient. I know of an English lady that has her own law firm in Aspen Woods that I would be happy to recommend. She is a real estate lawyer and should be able to set you straight.

Lawyer's fees vary around the city and they are usually set by the value of the property being bought/sold. Some include all disbursements in their fixed fees, others charge disbursements on top of their fixed fees. Make sure you check this when you call around as disbursements can add a large amount to what may appear to be a reasonable fee.

If you are purchasing the lawyer will provide you with a Statement of Adjustments which will document the purchase price and any other amounts that you need to pay (tax payments owed to the vendor etc.) The Statement of Adjustments will then deduct any deposit you have paid, any amount you will receive from the lender and then add the lawyer's fee. The lawyer will then confirm how much you need to provide to the office to enable them to complete the transaction and the date by which this amount must be paid.

When you go in to sign the documents (the lawyer will prepare the mortgage, not your lender) you will likely have to drop off the cheque. The lawyer will then request the money from the lender at the appropriate time and will then ensure that the appropriate documents to the vendor's lawyer to enable the deal to close. Usually, at the same time the lawyer will bill you, send you an invoice and pay himself from the funds you previouly provided to them.

dbd33

Aren't most FSBO homes now listed on mls? Locally The Property Guys, a major FSBO assistance firm, have an arrangement to provide an mls entry for a fixed fee. I'd say that a third of homes offered for sale locally are FSBO with mls listings.