New BGRS Payment System – 25 Mar 2019
We are pleased to inform you that effective 1 April 2019, BGRS will be paying Third Party Service Providers (TPSP) directly, for Canadian Armed Forces (CAF) Members. Per industry best practices, Real Estate Commissions will be paid to Lawyers and Notaries that form part of the TPSP Directory, who will take care of the disbursement of funds. In addition, BGRS will continue to pay TPSPs directly, for Government of Canada (GOC) employees.
We understand that some transactions will be occurring during the implementation period, and that in some cases in the upcoming months, CAF Members will have to pay their TPSP directly, to ensure successful transactions.
More information will be sent prior to April 1st, to outline the details of the new process.
We look forward to implementing this enhancement and appreciate your continued partnership with BGRS.
Military Implementation of New Relocation System ( some info has changed )
The Military is planning to start implementing a new relocation system. Yes, you heard right, with the Phoenix Pay System fiasco still not resolved, the Federal Government is venturing out into unknown territory with the Military and Civilian relocation personnel as Guinea Pigs.
Gary Walbourne, Canadian Armed Forces Ombudsman, recently made this statement in Kingston on his trek around Military Bases, ” A bigger issue that will likely affect military personnel across the country, and one that Walbourne said he is concerned about, is the implementation of a new relocation system.” “I think every base and wing across the country is going to be impacted,”
Mr Walbourne also stated, “What I am afraid of is, if we are not going to put in the right resources now up front we are going to be dealing with it administratively after trying to clean up the files, trying to get people back to the right place, making sure they have been fully compensated or drawing back dollars if they have overspent.”
He is also worried that the supports won’t be in place when the new system is introduced.
Interesting how when the last contract for Relocation came up for renewal it was given to Brook Global Relocation Services without competition. Now as time rolls around BGRS is establishing a new contact center with 100 experienced staff. Again without Competition or Tenders being offered to ensure the best service and price for taxpayers.]
New Real Estate Commission Reduction
The federal government is cutting commission rates for Realtor services on the National Integrated Relocation contract (IRP) and Ontario Realtors will share a total of 3.7% for listing and selling a relocating government employee’s home, as of January 1, 2017. (down from the previous rate of 4.1%)
Relocation Personnel will see there selling prices drop compared to possibly even a neighboring property. Out of town Realtor’s with clients looking for homes will probably never show your home with a listing cap of 3.7%. The Government will of course save money, while the transferred personnel possibly will not realize the best possible selling price for their home. If the Federal Government weren’t is such a “cozy little relationship” with Royal LePage they probably would have went with ComFree.
As stated in Article from Oasis Realty Brokerage of Ottawa
What risks might a relocating government seller be facing?
1) fewer Realtors may be interested in listing properties on the program, given the compensation level.
2) Realtors may also ask employees to “top up” the government paid fees, so they can achieve their usual %. This happens regularly today with those selling or buying a private listing or FSBO where a significantly lower commission rate is offered to a buyer representative. The standard Buyer Representation Agreement signed by most buyers provides for the buyer paying incremental Realtor commission if the seller does not pay an agreed upon fee level ie 2.5%.
3) If one believes that Realtors are significantly “coin operated” then sellers may also see less interest from buyer agents in their properties, as those representatives may favour properties where the buyer representative commission is more robust. Getting paid 27.7% more on property “B” than government listed property “A” is a pretty compelling advantage. This amounts to about $2,600 on the average $400K sale or purchase.
4) Listing agents will certainly have less budget monies for advertising and other costs to support their government listings when one considers they are also splitting commissions with their brokerage.
5) properties may take longer to sell if satisfactory “full commission” alternatives are available.
Government employee sales will continue but there may be a few service wrinkles given the now “discount” fees being paid by the Federal government.
Many Realtors will be happy to list your home for sale, there will never be a shortage of Listing Agents. But how much work will they put into your listing if they have to give most of the commission to the Selling Realtor in order to get them to bring clients to your home.
This is a typical list of items a Realtor does when Listing Your Home for you.
- Listen carefully to make sure your objectives are understood
- Explain the home selling process thoroughly
- Discuss real estate agency representation
- Price your home correctly
- Give tips for staging your home for a faster sale
- Implement a proven real estate marketing plan.
- Make every effort to sell your home promptly
- Generate and follow up on leads
- Communicate with you consistently so you know what to expect
- Network with the entire real estate broker population
- Diligently track the closing process on the sale of your home
Advertising it probably the First item that will be cut back due to loss of commission. Second will be time spent on your listing, as most Listing Agents have multiple properties listed at the same time and those properties will be at the typical 5% commission rate. Selling one of those properties will put more money in their pocket than selling yours at the Government enforced reduced commission.