Sellers ask what the realtor fee is, and the fee is only the first line of the bill. Here is the full list of what leaves your sale proceeds in British Columbia, which parts are negotiable, and which numbers you should ask for in writing before you list.
The commission, and why no rate is standard
The brokerage fee is the largest cost in most sales. BC Financial Services Authority, the provincial regulator, states that there is no standard commission and that any commission amount can be negotiated between you, your real estate professional and the brokerage. A brokerage can refuse the rate you ask for, and you can take your listing elsewhere.
Most listing contracts express the fee as a percentage, so the dollar amount is unknown until an offer arrives. The commission page explains the form that converts that percentage into dollars before you accept an offer.
Part of the seller's commission is commonly offered to the brokerage that represents the buyer. BCFSA notes that a buyer must be told how much of their brokerage's pay is coming from the seller.
Tax on the fee
The Canada Revenue Agency says services from a GST registered real estate agent related to selling real property will generally be taxable even when the real property in question is exempt, and the agent charges and remits the tax on their commission.
When you compare quotes, compare the totals with tax included. That is the number your lawyer will deduct from the proceeds.
Legal or notary fees
A lawyer or notary handles the paperwork that transfers the property and pays out your mortgage. Fees differ by firm and by how complicated the file is, so ask for a quote rather than assuming. Ask what disbursements are included, since those are billed on top of the fee itself.
Your mortgage: discharge and penalty
Two separate costs hide here. One is the administrative charge to discharge the mortgage from the title. The other is any penalty for ending your term early, which depends on your contract, your rate type and how much time is left.
Lenders calculate penalties in different ways, and the difference between two methods can be large. Ask your lender for the exact figure in writing before you list, and ask whether your mortgage can move to your next property instead of being broken.
Preparing the home, and moving out of it
Preparation costs vary with what the home needs: cleaning, paint, small repairs, garden work, sometimes storage so rooms photograph properly. These are the costs you control, and in our experience they return more than any other money spent on a sale.
Then there is the move: movers, time off work, and the overlap if you own two homes for a few weeks. Plan that overlap on paper before you commit to dates.
What sellers do not pay
Property transfer tax is paid by the buyer when they purchase, so it does not come out of your proceeds. Adjustments at completion can still move money either way, for example if you have prepaid property taxes or strata fees past the completion date.
Tax on any gain is a separate question that depends on whether the home was your principal residence. Ask your accountant rather than taking a general answer from a website, including this one.
Getting a real number before you list
Ask for three things in writing: the brokerage's total fee with tax at a realistic sale price, a quote from a lawyer or notary, and your lender's payout statement with any penalty. Those three cover most of what leaves the sale.
Then subtract them from a realistic sale price rather than a hopeful one. The sellers who are calm at completion are the ones who did this arithmetic before the sign went up.
If you want that worked out for your own home, with the numbers written down, book a 20-minute chat with the FRIVE team. If the answer is that this is the wrong year to sell, we will say so.
Common questions about the cost of selling
- What fees do you pay when selling a house in BC?
- The largest is the brokerage commission set in your listing contract, plus the tax charged on that service. Then come legal or notary fees for the conveyance, the cost of discharging your mortgage and any penalty for breaking it early, and your own preparation and moving costs.
- How much are realtor fees in BC?
- There is no set figure. BC Financial Services Authority states that any commission amount can be negotiated between you, your real estate professional and the brokerage, and that no standard rate applies to everyone. Ask two or three brokerages for the total in dollars at a realistic sale price.
- Does the seller pay the buyer's agent in BC?
- Commonly part of the seller's commission is offered to the brokerage representing the buyer. BCFSA notes that when a buyer is represented, a portion or all of that brokerage's pay often comes from the seller, and the buyer must be told the amount.
- Is there tax on realtor fees?
- Yes. The Canada Revenue Agency states that services from a GST registered real estate agent related to selling or renting real property are generally taxable even when the property itself is exempt, and the agent charges and remits that tax on their commission.
- Do I pay a penalty for breaking my mortgage when I sell?
- That depends on your mortgage contract and where you are in the term. Lenders calculate penalties differently, so ask your lender for the exact figure in writing before you list. If you are buying again, ask whether your mortgage can move to the new property instead.
- Do sellers pay property transfer tax in BC?
- Property transfer tax is paid by the buyer on the purchase, not by the seller on the sale. Sellers should still budget for legal or notary fees, the mortgage discharge, and any adjustments for property taxes or strata fees already paid.
- Can I reduce what I pay to sell?
- The commission is negotiable, and so is what it includes. You can also reduce cost by preparing the home yourself, by timing the sale so you do not carry two properties, and by getting a written penalty figure from your lender early enough to plan around it.
This page explains published rules from BC Financial Services Authority and the Canada Revenue Agency. It is general information rather than legal, tax or mortgage advice. Talk to your lawyer, accountant and lender about your own sale.
