How Much Commission Do Realtors Charge in BC? Is It Negotiable?

If you are about to sell or buy a home in British Columbia, commission is likely one of your first questions. For sellers it is often the largest cost of the sale, and it is not always clear who pays whom or what is actually fixed.

This article explains how commission is structured, why it can be negotiated, what must be disclosed to you, and how GST changes the total. It does not quote typical percentages, because the figure that matters is the one written in your own contract.

This article covers the law of British Columbia.

Commission is set out in your service agreement

Your written service agreement must state the remuneration payable and the circumstances in which it is payable. Because the figure is written into a contract between you and the brokerage, it is something you can read, question and discuss before you sign. How much you agree to pay depends on your situation, so it is worth confirming with a lawyer if you are unsure.

A brokerage providing trading services must have a written service agreement signed by the client and an authorized brokerage signatory, made before the brokerage represents the client in offering the property for sale. The exception is that a prospective client may waive that requirement. Before you waive it, it is sensible to understand what protection you would be giving up.

Who pays whom

A managing broker, associate broker or representative must not accept remuneration for real estate services from anyone other than their own brokerage. In practice this means commission is paid to the brokerage, and the brokerage then pays its licensees.

When your agent presents an offer to you as a seller, the agent must disclose your payments to the listing brokerage, any payments to a cooperating brokerage, the amounts retained and other licensee remuneration. A licensee must also promptly disclose to the client all remuneration paid or payable to the licensee's related brokerage, including its source and amount.

Commission is normally paid from the sale proceeds held in trust. Remuneration can be withdrawn from trust only once it is earned as determined under the Rules, and one of the set points is the date the transfer documents are submitted to the land title office for registration. Any share payable to another brokerage is paid directly from trust.

How GST affects the total

GST is charged at 5% on the value of the consideration for a taxable supply. In BC, GST rather than HST is the sales tax that applies to a brokerage's commission, so a 5% GST amount is added on top of the commission.

This is why you should ask whether a quoted percentage includes or excludes GST. A commission that looks modest can cost more once the tax is added, so ask for the dollar figure on a realistic sale price, with GST shown separately.

What to discuss and ask about before you sign

The commission amount is the figure written into your service agreement, which must state the remuneration payable and the circumstances in which it is payable. That makes it a term of the contract you can raise with the brokerage before you sign, rather than a figure you simply have to accept. How much room there is to change it depends on your situation, so it is worth confirming with a lawyer if you are unsure.

• Ask questions about the remuneration the agreement must state, and the circumstances in which it becomes payable.
• Ask about the expiry date of the agreement, which the agreement must state.
• Any amendments must be in writing and signed by the client and an authorized signatory.
• Whether the agreement covers only listing the property or other services too.

One limit is that a licensee must not request or agree to remuneration based on the difference between the listed price and the actual sale price, and cannot keep remuneration calculated that way.

Ending an agreement early needs care. The Rules require a stated termination clause only for rental property management and strata management agreements, and no general statutory right to cancel a listing agreement appears there, so the contract's own terms govern early termination. Read any termination, protection or holdover wording before you sign, and ask a lawyer if it is unclear.

What to do next

• Ask each brokerage you interview for its proposed commission in writing, with GST shown separately.
• Read the expiry date, the remuneration clause and any early-termination wording before signing.
• Ask for a copy of the agreement; the brokerage must deliver a copy immediately on execution.
• Ask what is paid to any cooperating brokerage, since this must be disclosed when an offer is presented.
• If anything is unclear, have a lawyer review the agreement before you sign.

Frequently asked questions