15 Sep Real Estate Fees
Ever notice that no one talks about this? Even talking about the basics is confusing. At Keylo, we believe in honesty and transparency… So, let’s talk about it. Here is the breakdown of what you need to know about real estate fees!
All Fees are Negotiable
All fees are negotiable. This is technically true but a brokerage may decide to set their real estate fees and stick to that. For example, you may see an advertisement to sell your home for $10,000 and that fee is set. Also, any specific real estate agent may or may not negotiate with you. What is true is there is no required or set fee from a real estate board or regulator.
What does that mean for Keylo? We work on a few basic principles. In this case, it’s trust and partnership. We could give you a typical response like “If we just give you a discount, how do you think we’ll do when it comes time to negotiate your home” or “O.k. what services would you like me to exclude?” but what we’ll do instead is give you the honest answer. We concentrate entirely on meeting your personal goals and selling your house for the highest amount by investing in you from day one. We are not a discount brokerage. This means we work hard for what you get in your pocket at the end of a sale.
7% / 3% is common in Alberta but this is not set by any board or council
So this is something we can’t simply answer as a short statement and there is a simple reason why. Commissions aren’t published publicly (not yet anyway). Keylo would love to give you an aggregated graph of every home commission from real estate fees so you can see what’s out there. More information is good for everyone. Real estate agents that add value shouldn’t be scared of telling people.
So what can we tell you? In western Canada it is common to see commissions posted with two rates. The first number applies to the first $100,000 of the sales price. So 7/3 split would be $7000 on the first $100,000. The second number applies to the remainder. So if it’s a $400,000 home, the remaining $300,000 (after the first $100,000) has the second rate applies (in this case 3% or $9000).
The seller pays for both the buyer's and seller's agents
Yes, you read that correctly. The seller pays for both agents. So is the buyer’s fee negotiable? Yes, all real estate fees are negotiable including these. The exact fee split between seller and buyer is written into your contract for listing your home. It’s common to see this split 50/50 between seller and buyer.
What about Keylo. We want to answer a simple question. If you reduce the buyers fee do you get less for your home? Most people will tell you this is true. Intuitively it makes sense that offering less will motivate fewer people to come to see it but Keylo is about facts not anecdotes. We are working on getting this information to you but we may never be allowed to show this to the public. In the meantime, we can work on the whole buyers and sellers process to make it better which should lower the fees as we scale up in size.
Keylo Care is a better option!
Why choose Keylo? Let’s start with the evidence. We sell homes for 2% more on average in 2022 vs an independent third-party appraisal in Edmonton. Instead of cutting real estate fees we invest in you and tools that help you. Let’s make an example. If your home is worth $500,000 and you pay 7/3 split it’s 3.5/1.5 to Keylo (the other half goes to the other real estate agent). That works out to a flat fee of almost 2%. If Keylo can save you 2% on average (this is not a guarantee) and you pay us just under 2%, we are essentially free to you in the end.
We keep constantly investing in technology and processes to keep ourselves ahead of the curve. Buyers ultimately set the price for a home but we find ways to ensure we get access to qualified buyers and maximize what your specific home could get.
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