How the 3% Flat Rate commission works in Vernon Real Estate Market.
In this White Hot Real Estate Market, many homes are selling within hours or days of listing activation rather than weeks or months of days gone by. Home Sellers in Vernon and North Okanagan are frequently getting top dollar (and in many cases selling over list price) and now more than ever, sellers should not only be looking to maximize their price but also should ensure they are not paying too much in commission payments. It is stunning that many offices and agents still insist on charging “home run knock it out of the park” commission rates for sometimes as little as 9-17 hours of work. This is done at your expense and this is why we always recommend you shop and compare. Especially now, as the internet has leveled the playing field while the listing exposure of real estate exposure has increased while marketing costs have generally remained static. When you closely review and compare between agents and brokerages, in many cases, you are not receiving any additional services, benefits, or marketing services, yet you are being over-charged anywhere from $4,000-$17,000+ in commission fees. It is shocking that some agents, reeking of commission breath, feel justified in charging these fees, yet they are unable to articulate any clear improved advantage in exposure or more importantly better results compared to other agents charging a fraction of the commissions they insist on receiving.
- Today we will not get into the comparisons too much (save that for another post) but will specifically address how the Flat Rate 3% commission rate works for selling Real Estate in the Okanagan.
The 3 % commission rate is all you need to pay here in the valley to receive full marketing including internet and social media exposure. This flat rate also includes a professional photographer/videographer taking pictures/video and/or drone photos. Additionally, our office provides home prep and staging advice, email campaigns, and other tailored perks.
Best of all the marketing exposure includes your listing posted on all the major brokerage websites across the country for no extra charge because of a data share agreement we have opted in on. This is very compelling because it is agents from these same offices that will charge you more commissions stating that their major advantage is the big brokerage website exposure.
So how much does it cost you when selling your home here in Vernon or the North Okanagan?
Here is a simple graph for your reference:
3% flat rate commission for varying Sale prices is as follows:
Sold Price Total commission payable
$300,000.00 $9000.00
$400,000.00 $12,000.00
$500,000.00 $16,000.00
$600,000.00 $18,000.00
$700,000.00 $21,000.00
$800,000.00 $24,0000.00
As you can see even at the flat 3% there is still a healthy commission payout that is still considerably less than what many agents may try to charge you.
Another factor to consider is that there is a real incentive for agents and buyers to be attracted to purchase Vernon and North Okanagan real estate at 3% because these sellers, that choose to use the 3% flat rate commission model, price their home correctly from the onset because they do not have to compensate for the extra amount of commission that they would be over-paying to the offices that charge higher rates. This means the listed home is priced right from the beginning attracting more buyers and selling more homes. Does it work…..you bet, I (Rod O’Keefe) have sold more homes than any other agent/broker at any brokerage in Vernon and North Okanagan for the past 8 years combined (2014,2015,2016,2017,2018,2018,2020,2021).
It is fair to note that the 3% commission rate is split between the buyer's agent and the listing agent, so buying agents are getting half (1.5%) of the commission posted while the listing office keeps the other half (1.5%). For example, when we sell your $600,000 home at 3% you are charged $18,000.00 in commissions. The agent who brings the buyer gets $9000 and our office who has listed the property is paid the other $9000.00. There are no other hidden fees, sign-up fees, or cancellation fees. All of the marketing fees and listing preparation and management come from the commissions the agent is paid and the Vernon/Okanagan agent only gets paid when your home is sold.
Finally, and most noticeably the flat 3% model is transparent and easy to calculate and understand. It is not designed like many other Real Estate commission models (7% on the 1st $100K and 3.75% on the remainder) to confuse the public, or shroud the process in uncertainty using percentages while not disclosing the actual dollar amount. You should know the exact commission at any given selling price before listing and your agent should be able to produce a price sheet at your home evaluation and/or listing meeting for your review and understanding before you list your home. Industry standards now include a Disclosure of Expected Remuneration at the time of offer but it is also very good practice for you as a savvy seller to be fully informed of what the commissions will be based on the varying price points during the listing agreement process. Remember it is especially wise to shop and compare both in terms of the services that you will be provided with while under contract but also in terms of the different commission rates that brokerages and agents are offering and the individual's sales results.
We stand behind our offer of 3% commission rates, exceptional service, and results that are #1 for Vernon and Okanagan. Remember to always shop and compare.
