FREQUENTLY ASKED QUESTIONS:
who pays for the realtor’s commission?
IF YOU ARE A BUYER,
Generally it does not cost you to work with a Realtor® to help you buy a place.
Instead typically the Seller pays for both the listing agent and the Buyer’s agent.
IF YOU ARE A SELLER,
Listing agents get paid when the property is sold. Typical industry standard commission structure is 7 % on the first $100,000 and 2.5% on the remaining*. (We offer a competitive commission model.) Talk to us to get more information.
So for example, if your listing agent sold your home for $1,000,000, $7000 (7 % on $100,000) plus $27,000 (3% on $900,000) = $34,000.
This commission is then split between the Seller’s agent and the Buyer’s agent (typically 60/40 split favouring the listing agent). Then depending on the brokerage, there is a brokerage fee that can take the commission down by sometimes up to 30%.
So in this case, your listing agent will get 60% of $34,000 minus 30% for the brokerage fee totalling $14,280.
* This is just an example and there are many creative fee structures. In rare cases, when dealing with reduced commission listings, Buyer’s agent may ask the Buyer to match typical commission as per their Buyer’s Agency Exclusive contract.
HOW TO CHOOSE THE RIGHT REALTOR FOR YOU?
There is no simple solution to pick the right Realtor®. I strongly believe it is all about how well you work with the Realtor® and whether you can trust him/her to do the right job for you. You should NOT just choose an agent based on the following reasons.
1, Don’t just choose a Realtor® because he/she is your relative.
2, Don’t just choose a Realtor® because he/she has lots of signs and flyers out there. That just means they are spending a lot of money on marketing and it may not be an indication of the quality of their service.
3, Don’t just choose an agent solely based on the year of experience. Decades of incompetence doesn’t equate to a competent Realtor®. Sometimes, newer agents are more informed and better trained than those in the business for a long time.
4, Don’t just choose a Realtor® solely because he/she has lots of listings. Make sure to hire someone that is never TOO BUSY for you.
5, Don’t just choose a Realtor® solely because he/she charges less than other agents. You get what you pay for. Will you trust your most valuable asset with anyone just to save few bucks?
WHAT IS THE ‘EXTRA’ COST ABOVE THE PURCHASE PRICE FOR A BUYER?
PROPERTY TRANSFER TAX:
1% on the first $200,000,
2% on the portion of the fair market value greater than $200,000 and up to and including $2,000,000, and
3% on the portion of the fair market value greater than $2,000,000, and
if the property is residential, a further 2% on the portion of the fair market value greater than $3,000,000.
so, for a $1m property, you are expecting to pay $18000
($2000 for upto $200k + 16000 ($800000* .02))
GST ON NEW CONSTRUCTION:
5% (so for a $1m property, you are expecting to pay $50000)
LAWYER OR NOTARY FEES AND EXPENSES:
- Searching Title
- Investigating Title
- Survey Certificate (if required)
- Drafting Documents
- Land Title Registration Fees
- GST on legal fees (5%)
add up to be approx. $1000 - $1500
HOME INSPECTION:
Approx. $400 - $750
APPRAISAL (IF REQUIRED FOR FINANCING):
Approx. $300 - $400
INSURANCE
Approx. $50 to $200 per month
Can I buy and sell a home in the same year and make a profit?
Historically yes without consequence. Now you have to be careful.
If you assign the contract before Completion, you may require the Seller’s permission and forfeit all or part of the profits to the Seller.
After Completion, if you sell again within the same year for profit, as of January 2023, the federal government has introduced Anti-Flipping legislation whereby you might lose your principal residence status and 50% capital gains exemption and pay a hefty tax on your profits. Possible exemptions exist for situations like divorce, medical complications etc.
What is the Home Buyer Recission Period (HBRP)?
Introduced in January 2023, this is a mandatory 3 business day period whereby a Buyer can pull out of their residential Contract by serving written notice for ANY REASON. If a Buyer does choose to rescind, there is a mandatory penalty of 0.25% of the Purchase Price which is forfeited to the Seller as compensation.
Can foreign Buyer’s still acquire residential real estate in Canada?
As of January 2023, the federal government has imposed a 2 year ban on foreigners acquiring residential real estate in all of Canada.
There are some considerable exemptions such as foreign students awaiting their PRs, those with work permits, foreign diplomats and those with Indian Act status.
Commercial real estate is exempt as are certain geographical areas outside the major metropolitan areas.
What the recent changes in strata property rules?
In November 2022, the BC Government amended legislation to no longer allow strata corporations to limit the number of rentals in the complex. Stratas are still allowed to restrict against short term rentals which is typically rental periods of 30 days or less.
Another major change was to eliminate most age restrictions. The only legitimate one remaining is a 55+ designation. Some of these “senior oriented” buildings will require all occupants to be 55+ and some may require only one resident to be 55+.
WHAT IS THE SPECULATION AND VACANCY TAX?
Most of home owners will be exempt as long as they live in the property as their primary residence or rented out for at least six months of the year. However, if you are not exempt:
For properties owned by December 31, 2018,
-0.5% of the BC assessed value of your property as of July 1st, 2018
-BC owners are eligible for a tax credit of up to $2000 on secondary properties
For 2019 and onwards,
-2% for foreign owners & satellite families
-0.5% for British Columbians & other Canadian citizens or permanent residents who are not members of a satellite family
WHAT IS THE EMPTY HOMES TAX IN VANCOUVER?
EHT started in 2017 at 1% of home’s assessed value. In 2019, it was increased to 1.25% and in 2021, EHT increased to 3%.
Most properties will not be subject to the Empty Homes Tax, including those:
- Used as a principal residence by the owner, his/her family member or friend, or other permitted occupier for at least six months of the tax year
- Rented for residential purposes for at least six months of the current year, in periods of 30 or more consecutive days