Banff to consider commission fee on housing corp resales
A public hearing has been set to get input on a Banff Housing Corporation proposal to move from a flat rate to a commission fee on the resale of equity-share properties.
Under the proposal, the BHC sales process for equity share properties on the registered resale list will remain the same, but will move from a flat fee of $2,500 to 0.6 per cent of the full market value of the property being sold.
A public hearing has been set for Sept. 24. It follows a lengthy review by BHC of its user fees and, if approved, would come into effect on Jan. 1 next year.
Officials say the idea to go to a percentage fee rather than the flat fee may better reflect the costs of providing services.
“The thinking is when the value of the properties go up the fee will automatically go up,” said Councillor Leslie Taylor, a council representative with the BHC board of directors.
“We are adding some new services now, like newspaper advertising and website advertising, and we feel it’s reasonable to have a slight increase in fees and there has been no fee increase since 2006.”
The BHC board had earlier considered a recommendation for a two per cent commission fee, rather than the current flat fee, to better cover the cost for selling BHC equity share properties through the registered resale list. BHC’s administration essentially acts as a realtor for homes sold on the resale list – although they don’t get involved in negotiations – yet fees charged by realtors on the open market average three per cent of the sale price.
According to an earlier administrative report, the present registered resale list fee for equity share properties of $2,500 is not an accurate reflection of the market costs of using a real estate agent to sell property in Banff.
The report says the fees currently associated with selling property on the open market by a realtor are an average of three per cent of the sale price of the property.
For example, had a two per cent fee been charged on the seven property sales on the registered resale list in 2011, the fee collected by the BHC would have been $65,593 instead of $17,500 based on the flat fee.
At a three per cent commission, it would have been $98,390 based on the sale of those seven homes, while a 1.5 per cent fee would have generated $49,195.
Taylor said the board considered various percentages.
“There was a proposal that would have been to make money and we had quite a discussion about that,” she said.
“In the end, we felt user fees should reflect the cost of providing the service and should be reasonable compared to the eternal market. A realtor would charge three per cent or up, so we felt 0.6 per cent was very reasonable.”
In addition, the board recommends an annual increase matching the maximum annual increase permitted to price restricted properties be added to the current resale fee of $2,150 plus GST, effective Jan. 1 2013.
Other user fees, including for mortgage consents, postponements, sublease consents and assignments and registered resale list application, remain unchanged.
“The board has recommended changes to the shareholder and this council has committed that we will always provide an opportunity for appropriate feedback with any changes,” said Mayor Karen Sorensen.
To date, BHC has constructed seven housing developments, with a total of 173 units and 45 suites.
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