A Money Coach in Canada

Follow & Subscribe

Ever raise an eyebrow over real estate commissions?

In BC, the unofficial-but-standard percentage is 7% on the first $100,000 (ie. $7,000) plus 3.25% on the rest of the home, according to Barry Allen, a founder of ClickRealty.ca

So for your very basic Vancouver condo, priced at, say, $300,000, you’d pay:

$100,000 x 7%                 $7000

+

$200,000 x 3.25%          $6,500

Total Commission:        $13,500

One option is to go the For Sale By Owner route, but that has a few drawbacks.  For one thing, the seller benefits but not the buyer (unless the seller drops the price to factor that in).  For another thing, realtors may not show the home to prospective buyers if the realtor isn’t going to get anything for their effort.

A handful of folks thought they could do better than that.

They formed a new real estate company that takes full advantage of the internet.  By scaling back on old-style marketing (such as adverts on bus stops) and creating an efficient behind-the-scenes database engine, they can provide the same service as most real estate agencies at a lower cost.

And they pass that savings on to the buyer and/or the seller.  Specifically, they return 50% of their commission to their client.

Here’s how it works.

Say I wanted to sell my $300,000 (ish) condo (I don’t for the record!  Never will! But I’m always looking for good, long-term tenants …)  ANYWAY,  say I was looking to sell.

If I list it with ClickRealty.ca, they will provide me all the usual supports – help me price it correctly (the #1 value realtors provide sellers), send a photographer over, recommend a paint job or what have you, and then list it for me.   From then on, the process is essentially the same as traditional agencies (less an open house, unless that’s genuinely in my best interest).

But once it’s sold, they would return 50% of what they, as a seller’s agent , would usually keep.   In my case, that would be $3,375.  They keep the other 50% of the seller’s portion and the buyer’s agent gets their full portion.

Say I wanted to buy a $800,000 home in Strathcona (some day I will).

Click’s site provides a beautiful window (it is very nicely done, including one of the most user-friendly mortgage calculators I’ve seen) to all the same properties as I would see anywhere else.  Barry points out that it’s faster than usual, as they don’t hold back any MLS listings for a realtors-only peek, apparently a common practice.  They would then provide the typical services, such as arranging for me to go check out the place, helping me to compare it to others).

The total commission on this home would be $29,750.  Half goes to the buyer’s agent and half goes to the seller’s agent.  In this case, Click is the buyer’s agent so their portion would be $14,875.   They give me back 50% of their portion, that is, $7,437.50   Hello trip to Restoration Hardware!

Currently, ClickRealty is available in BC’s lower mainland.  It will soon expand to the Calgary and Toronto markets.

I think it’s a bit of a game-changer, assuming it rocks the online space as a core piece of the process (thus enabling their lowered commissions).

Bonus:  Live in the lower mainland?  Tweet a link to this post and cc. [email protected] and on Wed., Sept 7,  there will be a draw for a basket from Liberty Wine Merchants.

Disclosure:  I was invited to do this review but it is not a paid review.  I am always interested in ways for folks to be “frugal” and think this new biz is worth consideration when buying or selling.

Any questions?  Leave them in a comment below and I’ll pass them along to the business owners for response!

Photo credit:  Imuttoo

About the Author


Imagine if Canadians were known for being all over their money. Engaged. Proactive. Getting out of debt. Savvy. Saving. Generous. Nancy wants to help. Nancy started her own journey with money over 15 years ago, and formed her company “Your Money by Design” in 2004 to help others along the same path. It’s not the usual financial advising/investment stuff. It’s about taking control of day-to-day finances –managing monthly cashflow effectively, spending appropriately, getting out of debt, saving. If you're ready to take control over your finances, pop by her business site, YourMoneybyDesign.com

7 Comments

  1. et

    – How will buyers find this new service?
    – How do they price properties?

    Access/familiarity to buyers and stats of sold/for sale comparable properties are the biggest advantages realtors using MLS have over private sales. I understand private sellers can now list with MLS but haven’t looked into this.

    I just sold a property in a slow market (craigslist, nice website, cleaned up, adjusted price, was available to show on short notice).

    – What is the advantage of using these folks rather than my DIY approach? Or any one of the many FSBO sites already out there?

    [Reply]

    Sep 03, 2011
  2. Thank you. Your question is much appreciated.

    The purpose of ClickRealty is to provide the consumer with as much information as possible to all them to make better decisions while reducing the cost of what is typically a very expensive transaction.

    Home owners can certainly endeavour to sell their own homes but there are many aspects of a real estate transaction that a typical home owner may not be prepared to handle. For example: It is important to get proper legal advice to ensure the contracts are enforceable as well as establishing an realistic price and marketing the property to the broadest group of buyers. These are but of few of a long list that can impact your transaction.

    ClickRealty provides a full service environment, which includes pricing with the very latest data, listing on our website which employs the latest technology as well on numerous other sites including MLS®. Effective photography, hosting open houses and attending all showings with detailed follow up with the prospective buyers. We also negotiate and ensure the contracts are in order. This will reduce the stress of buying a home or selling your home and achieve the best possible value.

    Our website, clickrealty.ca has a great deal of information as well as VOW (virtual office website) searches which are updated hourly. This provides home buyers and sellers with the most up to date information possible.

    Please feel free to let us know if you would like any further information about our services.

    Thanks again.

    [Reply]

    Sep 05, 2011
  3. “as they don’t hold back any MLS listings for a realtors-only peek, apparently a common practice”……never heard of this and I certainly don’t do this.

    There are a lot of great Realtors in Vancouver including myself of course who charge fees similar to clickrealty.ca ….just saying.

    [Reply]

    Nancy (aka Moneycoach) Reply:

    @MJ You know I send folks your way because I *so know* what great value you provide and I trust you completely. I do think the click.ca model is an interesting one. I’m also interested, not to pry, to hear that you (and others) who don’t charge the 7% plus 3.25%. How widespread is that commission and how widespread are the commissions more along the lines of what click.ca would provide? The sense I got from click.ca is that this is by no means an anti-realtor biz, but if anything, changes the game for agencies.

    [Reply]

    Sep 05, 2011
  4. MJ; we truly appreciate the feedback. First and foremost, there are many fabulous REALTORS® that provide an invaluable service to their customers. Thank goodness as it a truly complicated industry.

    To address the MLS comments, ClickRealty chooses to share every listing (in VOW format) in real time so the consumer can arm themselves effectively when searching for a property to buy or establishing the best listing price for their home. As for the Fee component of your comments, we understand the complexities and emotions of a real estate transaction implicitly as we have been established since 1994. We have simply taken what many customers feel is an uncomfortable conversation out of equation by putting our fee structure in writing, in plain view for everyone to see. As we declare we offer this fee structure “exclusively to everyone”. This way all of our customers are assured that they have access to our best rates regardless of status. Kind regards, ClickRealty “We Share Everything”

    [Reply]

    Sep 06, 2011
  5. et

    MLS can be reached at mls.ca by all interested parties. Or I mislead?

    With all due respect I would rather have a lawyer give me “proper legal advice” than a graduate of a self-paced correspondence course comprised of 20 multiple-choice assignments and a 3-hour multiple choice final exam followed by a five day in-class course (current BC real estate licensing requirement http://www.recbc.ca/licensing/trading.htm).

    [Reply]

    Sep 08, 2011
  6. Granted the licensing requirements aren’t a great barrier to the business. That doesn’t mean all REALTORS can’t provide a valuable service. An attorney can direct you with contracts but probably won’t want to visit 10 homes on a Saturday afternoon. They also don’t negotiate pricing and terms. A full service agent can do exactly that.

    Click Realty is simply a provider of a service that many people simply don’t want to do on their own. If a real estate consumer is looking for the most up-to-date information they are welcome to search on our site. Our listings are updated hourly and if you want VOW level information it is available with a MyClick account. This gets you greater details on listings and we don’t contact you unless you ask us to. When a listing is entered into MLS it takes up to 48 hours to be posted for real estate professionals to access and up to an additional 48 hours for the information to hit MLS.ca. We post the information when the agents receive it. That alone is a reason to do your searching with us.

    Thanks for your comment.

    [Reply]

    Sep 08, 2011

Leave a Reply




CommentLuv badge