How we think about realtors and mortgage brokers
Agent income is a string of closings, and closings keep their own calendar. Coquitlam's condo and townhome market is large and moves unevenly: a tower in City Centre completes and several deals fund in the same fortnight, then a month goes by with nothing firm. The books have to make the slow month as legible as the busy one.
That's why we work from the paperwork that describes the deal, not just the bank. A deposit is a net number. The brokerage's commission statement shows the gross, the split, desk and transaction fees, and the GST. We book from the statement and then tie it to what landed.
Mortgage brokers have the same lumpy shape with different documents: the brokerage's compensation statements and whatever lenders report on top. Under BC's Mortgage Services Act, a broker can be paid through a personal mortgage corporation once that corporation holds its own BCFSA licence (BCFSA's PMC page). If you have one, it gets a ledger of its own.
What makes the books different
- The PREC is a separate company. When you trade through a personal real estate corporation, the brokerage pays the corporation rather than you (BCFSA PREC guidelines). Its account, revenue and costs stay out of your personal records, and whatever you draw is booked as salary, dividend or shareholder loan, whichever your CPA has chosen.
- Trust funds are not your ledger's business. Deposits held in trust sit in the brokerage's account and follow BCFSA's trust account guidelines. We record your commission when the brokerage releases it, and leave trust accounting to the brokerage.
- Uneven income needs a reserve. Every close shows GST collected plus a holdback toward income tax at a percentage your CPA sets. A strong spring in Burquitlam or up on Westwood Plateau stays earmarked instead of drifting into everyday spending.
- Mortgage income follows different GST rules. CRA treats arranging a mortgage loan as an exempt financial service in many cases (bulletin B-105), and GST paid on costs for exempt work generally can't be claimed back. We code each income stream by type so your CPA can confirm the treatment before a return goes in.
What a monthly close looks like for you
A short, repeatable checklist, run whether the month had five closings or none:
- You drop commission statements and receipts into a shared folder or Dext as they arrive: listing photos, staging, signage, client gifts, board dues.
- We reconcile the PREC's chequing, credit cards and any line of credit to their statements.
- Each commission is booked at gross, with the split and fees as separate lines, then matched to its deposit.
- Vehicle costs are coded against your mileage log, since driving is one of the larger lines for most agents.
- By the 10th you get a profit and loss, a balance sheet and a one-page note: deals closed, GST owing, tax reserve, and the shareholder-loan balance.
GST returns go out on your filing schedule through our GST and PST filing service. The whole routine sits inside monthly bookkeeping, and our entry on PREC bookkeeping for BC realtors walks through the set-up in more detail.
Tools we commonly use for realtor and mortgage broker clients
- QuickBooks Online or Xero, with a separate file for each entity: the PREC, a HoldCo if there is one, and personal rentals if we keep those too.
- Dext for receipts, so a parking stub from a showing is captured the same day.
- A commission register, a simple spreadsheet listing each deal's address, closing date, gross, split and net. It makes year-end and any CRA question quick to answer.
- Plooto for paying suppliers and Wagepoint if the corporation pays you a salary or employs an assistant.
All subscriptions stay in your name.
Partners we work with
We don't name firms. We coordinate with:
- CPA firms that prepare year-end statements and returns for PRECs and incorporated mortgage brokers
- Real estate lawyers and notaries, when a closing or a personal purchase needs paperwork from the books
- Brokerage office managers and their accounting staff, when a commission statement needs correcting
Your CPA makes the tax calls. We make sure they arrive at a reconciled file with the source documents attached, through our year-end preparation work.
A good fit if
- You hold a BC real estate or mortgage licence and earn through a PREC or a personal mortgage corporation, or plan to
- Most of your year arrives in a few heavy months and you want to see what is truly spendable
- You'd like one bookkeeper who reads brokerage statements fluently and answers by the next business day