My husband recently sold his Vancouver condo through One Percent Realty and I thought I would share his experience.
First off, I should explain that I’m not a huge fan of realtors (and neither is my husband) especially in Vancouver, because to be frank, many realtors in Vancouver are making a killing doing not too much work, and not having very much educational background for their job. Obviously I went into the wrong field haha.
The typical fees charged for a full service realtor is:
7% on the first $100,000= $7000 and 2.5% on the balance.
This is split between the buying and selling realtor. On a $500,000 condo you would be paying ($7000 from first $100,000 and $10,000 on 2.5% of the $400,000 balance) $17,000 in commission + 5% GST, which means $17,850.
So if you have a list and sell price of $500,000 you are not making $500,000 but instead have to take $17850 off the top, which nets $482,150 (and you have to pay for a notary/lawyer on top of that or other repairs if needed from the inspection).
As a review, the typical “buying realtor commission” charges are:
3.255% on the first $100,000 and 1.1625% on the balance
So when you are buying real estate and going around looking at properties on weekends with your realtor, it’s “free” sure, but the price is paid for by the seller. Which means you pay for it, in a sense.
On a $500,000 condo, this equates to:
$100,000 x 3.255%= $3250 + ($400,000 x 1.1625%=$4650)= $7900
Therefore the selling realtor usually gets $9100 and the buying realtor usually gets a little less, $7900.
What is One Percent Realty
One Percent Realty is a full service real estate listing service/ realty service without the high commissions of a typical real estate service such as Sutton, RE/MAX, or MacDonald Realty. One Percent Realty is not available across Canada but it is available in British Columbia, Alberta, Saskatchewan, Ontario, and in the Atlantic region.
They have full service realtors that include services such as:
- MLS listing on Realtor.ca
- Open houses to display your home
- Advertising, signage and photographs for the listing
- A market evaluation and advice on listing price
- Showing your home to prospective buyers
- Helping you review the offers and liaising with other realtors
Why One Percent Realty was Chosen
My husband chose One Percent Realty because, well, he’s a frugal guy and doesn’t like paying for anything that he doesn’t see is of value. He interviewed a few realtors and decided that he would go for One Percent Realty because he liked the transparency of the commission. One Percent Realtors deal with a lot of volume (they have lots of customers) for what they lack in commissions, the One Percent realtor wasn’t schmoozy or pushy and just laid what he can offer out there without much pizazz, which is what we like.
Of course, the low commission is the may draw of One Percent Realty:
The commission charges on One Percent Realty is a flat fee of $6900 on homes listed under $600,000. The selling realtor gets around $3900 and the buying realtor gets $3000.
For homes over $600,000, the price is 1% + $900.
On a $1,000,000 home (e.g. townhouse because you can’t get a house for $1,000,000 in Vancouver anymore, let’s face it) the commission charges are $10,900 + GST, compared to $29,500 for a typical realtor.
Yeah, you read that correctly. THAT’S A HUGE DIFFERENCE!!!!!
The One Percent Realtor met with my husband and provided a detailed market analysis report on the units sold nearby and the market, including the average price per square foot in the neighbourhood.
They set a listing date, set a price, provided recommendations on how to present the condo, and arranged for a professional photographer to take pictures and list it on the realtor.ca website.
He set up a few open houses and updated my husband on the amount of people who showed up and the interest on the condo. At first it seemed quite slow but the offers started rolling in. In total, my husband received eight offers, but not simultaneously. Some were low ball offers, some were over asking but the selling realtor was asking for full commission (and refused to budget), some had really late closing dates, and some had no subjects. What we were shocked at was that the realtors were asking for full commission and many refused to adjust or budge on the amount they are to receive. My husband counter offered each time and capped the buyer commission. Of the final offer that was accepted, the buying realtor agreed to cap the commission (the buying realtor was still getting more than the selling One Percent Realtor, which is astounding to me since the Selling Realtor did much more work- this would not be the case in a typical realtor scenario the selling realtor gets a little more commission).
One Percent Realty Pros
- As someone who has dealt with a typical RE/MAX realtor, I’d say the One Percent Realtor was very comparable. The video tour wasn’t as professional as the RE/MAX realtor when I sold my house a few years ago, but the pictures, floor plan, and listing details were comparable.
- Your listing will be on MLS.ca which is obviously the most important piece of it, most people are looking online anyways for real estate
- The transparent flat fee is great, in my opinion, the One Percent Realtor worked hard for that $3800 commission and it seemed of value.
- The process is similar to a typical realtor
One Percent Realty Cons
- Typical Realtors will try to avoid or not show their client the One Percent Realty listings because they are not interested in a ‘measly’ $3000 commission, therefore your listing will get less attention
- Therefore your listing might take longer to sell than usual
- Typical Realtors will still try to get the full commission (about 30-40% of offers, though in my husband’s case, it was 75% of offers) had a full commission request even though the selling realtor was One Percent Realty. For example, they were asking for $4900 more on a $500,000 listing, on top of the $3000 through One Percent Realty to make $7900 in full commission.
- It’s a bit ‘no fuss’ so, less marketing, you don’t get calendars in your mail with the realtors face on it (haha or maybe this is a good thing)
My husband would use One Percent Realty again if he had the opportunity to and for myself, I think I will use One Percent Realty too if/when I sell my own condo. Although I would likely be faced with having to pay higher commissions than the flat fee of $6900 it’s still better than the alternative, paying two times that amount for similar service. I would also likely have to be prepared that it would take longer to sell.
Think of MER’s and Bank “Financial Advisors” = Typical Realtors.
Think of Low MER’s “ETFs/DIY investing” = One Percent Realtors.
Just like with MER’s (Management Expense Ratios) with your investment portfolio 2.5% cut of your portfolio, there are hidden fees for the ‘full service’ and the flashy marketing, so if you are like me and don’t like paying high commissions and don’t mind basic service, go for One Percent Realty.
Readers, have you used One Percent Realty before? What did you think of the experience?