Real Estate Professional forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Agents must prove their value more than ever

Notify me of new replies via email
Real Estate Professional | 01 Dec 2014, 09:10 AM Agree 0
Arguments around cutting commissions are usually centred on the impact on a selling agent’s income, but full-service players are increasingly suggesting the practice has a knock-on effect for them.
  • Wayne Ryan | 01 Dec 2014, 01:46 PM Agree 0
    Commission based pay is always going to be contentious because there will always be those times or deals where we really don't actually earn that 'specific' commission. You know the one, where the house sells in a day or so or the buyer buys the first house you show them. The problem of course, that those clients rarely know about the many many hours of 'unpaid' work Realtors do. The buyers who spend several weeks looking for a house and then decide not to buy or to buy in a different area. The seller who change their mind and take the property off the market, the phone calls from appraisers, tax authorities, the general public, the educational and training courses and the list goes on. There is no way to avoid this unless Realtors started to bill like lawyers, where every time you make or receive a call or lift a piece of paper, you assign that time to a particular client and there seems to be no real push by Realtors OR the public to go this route. This means that commissions must cover everything a Realtor does, paid or unpaid, from Jan 1 - 31 Dec and when you look at it that way, they really don't seem high at all...
  • Laura Westgate | 01 Dec 2014, 02:42 PM Agree 0
    It would be unfair to state, Wayne, your quote: "there will always be those times or deals where we really don't actually earn that 'specific' commission. You know the one, where the house sells in a day or so or the buyer buys the first house you show them"
    When in fact the reputation and hard work it has taken over the years and dollars in advertising that it took to get a reputation and the knowledge that will allow a house to sell in one day or the clients that you can take out for 1 round of showings before they buy, because you earned that trust and reputation. So do not EVER say, there is not commission that is not truly earned!
  • | 01 Dec 2014, 03:05 PM Agree 0
    Our Real Estate Associations ( or a petition send to a member of parliament) are the channels that should educate & make our government aware that in order to have a professional representation dealing in real estate, it should be mandatory to have the public use a real estate mediator/adviser (from marketing, opinion of value of there property, disclosing, preparing the property for sale, negotiating, the ethics & responsibility that we engage ourselves every time we work with a client , and many other factors for up to the time they are ready to make an educated choice of service. That would help the public understand our position. This service could be given by Real Estate Brokers at a minimal cost with an explanation of his own cost for service base on how the client would like to be represented.
    Any other profession ( insurance brokers, investment brokers, Bankers, and many others are all mandated through our government. This would at least have a base for a long term business opportunity and employment, not to mention avoiding the many bad experience people goes through because of unknown factors in selling or purchasing the most expensive assets in their lives.
  • BestTorontoBuyer | 01 Dec 2014, 03:49 PM Agree 0
    Lower the cost of transactions in the city of Toronto until the land transfer tax goes away (if at all): use an agent to sell or put to market for lease not to buy. Buying you might as well use your lawyer.
  • | 01 Dec 2014, 05:01 PM Agree 0
    To Besttorontobuyer,

    Speaking my language!!! I would give my lawyer a few hundred more because I feel he sees all the mistakes,legal issues,wrong clauses for purchases etc... my opinon, Uber or someone will come along with a App that removes the agent and we use a Lawyer and that is it!! Or A mediator that we send the offer to and he/she negotiates the deal for a few hundred...more software..

    How can the article say if u remove high commissions you get less work,experience,skill etc...I know plenty of agents ,brokers,sales reps in all industries that do a great job for less money..

    The talk about advertising??? 99% of the advertising is the MLS system!!
  • Wayne Ryan | 01 Dec 2014, 05:13 PM Agree 0
    Hey Laura. I thought that I had made my point fairly clear that commissions ARE in fact earned over the long haul when you take into consideration ALL of the factors. You have added 'reputation' as a factor and I don't disagree but I do think you failed to understand the point I was making. I'm not so sure that telling someone you don't know to "never say a certain thing' is condusive to a meaningful discussion but I will simply assume you misspoke. Cheers
  • Jerry Snel | 01 Dec 2014, 05:35 PM Agree 1
    The public has no idea how much time, effort and money we realtors invest in being a realtor. Most Realtors after expenses are lucky to make $80,000 and those who do work at least 60 hours a week 52 weeks a year not including all the schooling that goes with the job. Also the risk involved with taking on a listing. They invest time and money and if no one buys it they don't get paid. Risk has to be associated with some kind of reward. Most realtors have a minimum $30,000 per year in expenses whether they make money or not. This does not include any form of advertising listings or themselves. This is just Brokers fees and other board fees and insurance (to name a few). Brokerages have teams of secretaries who manage the paperwork, viewings, calls, etc. Selling a home is one of the hardest thing you can sell. Agents protect the best interests of their clients making deals go smoothly and close as agreed. If it weren't for agents there would be mass confusions and lawsuits abound. Buying and selling would be so very risky. We keep the industry safe and secure. We make it look easy because we are trained and we are professionals. Of course there are agents out there who cant sell themselves because they don't really know what they're doing so they will list your home for little commission. But beware, once in a contract you cant get out. If an agent cant even negotiate his commission and show his value then why would anyone consider hiring that agent to negotiate and the show the value of their home.
  • Wayne Ryan | 01 Dec 2014, 05:42 PM Agree 0
    Most buyers work with a Realtor and pay NOTHING... so, if you can find a lawyer who will drive you around showing you houses, who will have a good knowledge of various neighborhoods, the market, financing, local housing issues, negotiations etc etc and who will provide this service for FREE then by all means, use a lawyer for buying!!! And if they come up with an 'app' that will do all that then God bless those techies:):)

    Just FYI, I'm a full time Realtor and when I decided to buy a home in Arizona the first thing I did was get in touch with a local Realtor who knew the area, the local market, local housing issues etc. and I relied heavily on his assistance and knowledge. To each his own.
  • | 01 Dec 2014, 06:03 PM Agree 0
    What kind of marketing? Aside from pricing right, MLS and nice photos what else is necessary?

  • Overpaid | 01 Dec 2014, 06:47 PM Agree 0
    Jery,

    Please enlighten me with ur $30,000 of costs!!!!??? How can a agent be needed for a condo especially, few walls and rooms,status certificate, previous sales...please tell me what else could be done?? Please don't tell me it is about the building ,every building has surprises,things that happen later.neighbours,new development in the area..etc..no guarantee no matter what the agent does/tells or knows,
    Uber is offering the same quality for 50 % less and I am sure there are issues in any service in full price or flat rate services..would rather keep the money in my pocket!!! Agents are way over paid for a service that has no real justification on their commissions...except the same old responses

    Agents: Online forms( 10-20 min of work) MLS is their best advertisement( free), other agent shows place)
    Taxi service to view properties
    Tour Guide, this is the Bedroom!!
    Shoot for previous sales
    Pay me..
  • dotti rich | 01 Dec 2014, 07:54 PM Agree 0
    mls is not free jery.
  • | 01 Dec 2014, 08:13 PM Agree 1
    what is free....are our services. from beginning to end....only do we get paid anything IF the house sells or we sell the house...wishin' hopein' prayin'.....pay the Brokerage....page the Tax Man...pay the mls dues...pay the E&O I...pay CREA...pay OREA....pay local Board...pay for ads...pay for business cards...pay for advertising...pay for gas...pay for cell phone...pay...pay...pay I say!!! Oh yes, why should we get paid for anything we do....why not out of the goodness of our hearts....what are we worth? We are either loved or hated.

    By the way go ahead and get your Lawyer to draw up the paperwork...I know of deals that a Lawyer did for a lady who bought privately...she ended up with a furnace that was busted...a garage full of garbage left behind by the previous owner and she paid full price...sure, save a "few hundred" and use your Lawyer....you might, may be, glad you did...maybe.

    How about the Lawyer who registered the wrong parcel in another of my Clients name...and the Tax Dept. came atter a year after saying she wasn't paying her taxes...turns out she was paying the previous owners taxes on a vacant parcel of land they also owned....doesn't matter that the Lawyer makes big mistakes like this and then try to deal with The Law Society of Upper Canada.

    By the way $5,000 is Listing Commission...equates (after Brokerage, Revenue Canada, other expenses incurred) to approximately $1,500 to $1,900 in our jeans. So, three months worth of work (approximately) equates to $500 to $650 a month....not bad eh "opinionated people" against us Licensed Sales Persons.
  • Michael Eisner | 01 Dec 2014, 08:20 PM Agree 1
    I always ask a client, after I sold their house in three days, if they would like to know why they should actually pay me a bonus on top of the full commission. They usually look at me with surprise, amazement and a question mark on their forehead. My response to them is: if you would've preferred to, I could have kept your property on the market for six month, would that be a proof that I worked any harder? Most contractors, especially large corporation and government's contracts, get a generous bonus if they finish a project they have contracted to do, ahead of schedule. It took me years to get to the point where I pick a client out of my database, that is ready to buy a specific property the day it comes out for sale, and to be able to do substantial due diligence before I take buyers on the hunt for a home. it's not a stroke of luck when they buy the first or the second house they view, it's good research, homework and legwork.
  • | 01 Dec 2014, 11:09 PM Agree 0
    Now it makes sense too many agencies,boards, brokerages fees,dues we are paying for!!!! That is why eliminate all that and home owners/buyers save a bundle.

    Cell phone, gas, board fees, crea,orea etc... what does this total?... maybe 2000-3000...so where does the other 27000 get spent!!!!??

    More Uber software platforms and we can keep our money!!! Go Uber...Flatrate service and pay 90% less and get the same results.

    I said before of course lawyers have made mistakes and so have High Commissioned Realtors...One way you pay 10,000-20,000 or just use a lawyer and save 10,000-20,000 and risk is the same!!!!
  • | 02 Dec 2014, 06:45 AM Agree 0
    As an active buyer of investment properties, I see the value that a "good and experienced" agent that specializes in an area can bring. However, I think the entire business model is flawed. I would be happy to pay my buyer's agent a fee for their services and this would simply be a cost of business to me.
    However, on the seller's side, I really question the value an agent brings to the equation for what they expect to be paid. I ran a FSBO company for a period of time and in almost every case, my client's sold privately for the same amount of money ore more then what agents were telling them to list for. On average it may have taken 1 week more on the market to sell, but they saved thousands of dollars for that week. technology has changed the industry and most old school agents really don't understand that they are not worth what they think they are. I can use a Comfree or PropertyGuys.com package to get more than what a typical agent offers, I have more control over the process. I sold my last home completely privately in less than a week and I made an additional $100,000 by saving the commission and taxes I would have been charged. There is absolutely no way an agent could convince me that two week sod their time is worth that. And for the justification that the hours and money spent on building your business requires clients to pay for this, give me a break! That is the cost of your line of business and you expect people to happily pay for this when you can have a service like ComFree or PG do this for you for approx $3000.
    My advice to agents is look towards a fee for service model and move that business model forward as quickly as possible or you risk losing your income slowly but surely over the next 10 years.
  • Lex Sheng | 02 Dec 2014, 10:51 AM Agree 0
    These are all good points, we are also competing again some part-time agents that cut commission as they see it as extra money. I have been told by clients they were badly represented due to lack of experience.
    The public really need to understand what we do and all the hard work that we as professional realtor's do to earn that money.
    I think there should be a system on a scale how we get paid.
    You got to most service places they list services and price.
    Junior $???? First or part-time education.
    Advanced $???? 2 years education but most eduction
    Senior$???? Years most eduction
    I myself total beleive in additional training and on going training to provide best service possible to my clients.
    This way we don't get painted the same picture for poor service. They know what they are paying for.
    The real question is where do we start?
    How do we get this ball rolling?
    How do we have one body one voice to show the public our service and value?
  • Fossils | 02 Dec 2014, 11:16 AM Agree 0
    Bottom line the the current Model for selling homes is a ancient/dinasour system. No way to justify the fees for a online form for listing,tour guide service, negotiate based on previous sales. How can this be a rocket formula for charging outrageous fees.

    lawyer only makes 1000 and the agents makes 10 to 20 times ..does not make sense...

    E signatures are coming for purchases etc, online legal will come, online negotiator will come..the system will cost buyers and sellers only hundreds, the information will be accessible(previous sales,assessments, home history) and the dinasour will be a fossil
  • | 02 Dec 2014, 03:35 PM Agree 0
    Ok - so who thinks agents should be paid by the hour? Maybe couple it with an apprenticeship program? Junior / intermediate / senior pay levels sounds right to me; why should a junior agent make the same amount as a senior agent? But! If that were the case, what would be the motivation by the agent to actually sell the house? Let's just keep this client going! Unless all fees were taken off the back end. Example: Charge for the advice up front. If the client decides to do it themselves, great. Agent takes the money. Then the agent doesn't feel that their services and expertise have been undervalued, or more importantly, that the agent has not been abused by a seller who never intends on hiring that agent. If the client decides to list, then the front end money collected comes off the back end when the property sells.

    Or, how about the agents form a union? Then they would enjoy job security, vacation days that increase over years of service, vacation pay (as opposed to paying someone else for looking after things while away), sick days, stress leave, medical, dental, pension... Let's not forget E.I. for when the market is in the toilet. Generally speaking, no one cares about agents and their well being or emotional health. The public is happy to think that agents are lowest of low, perhaps a necessary evil, when in fact, most agents are the most heart warming, caring, well educated and locally aware people who walk the town. Putting their clients needs ahead of their own sometimes means that an agent may not make a pay cheque. Sometimes the advice given is "the time is not right for you to sell, because you will lose a significant amount of money" or, "it is not the right time for you to buy because you don't have enough down payment... Let's wait for 6 months so you won't feel so strapped" Etc etc etc. Sometimes an agent won't make a pay cheque for months at a time (due to market conditions - not because they are a poor agent). It doesn't mean that the agent isn't working every single day of their lives to try and scrape it together. Or, what about the agent who goes into foreclosure themselves because they haven't been able to keep up with their monthly bills? Who feels badly for that person?

    The lawyer comment? Wow. Let's see lawyers go out into the trenches and deal face to face with the emotional roller coaster of buying and selling without a shred of evidence of being paid. It is not simply a paperwork journey.

    I agree that something has to change. Perhaps it is simply making the public more aware of what an agent does. I know of an agent who has been assisting the same couple for over 2 years trying to buy something. When they actually go ahead and buy, that agent will likely be upside down on that particular deal (accounting for lunches, gas, time spent at a professional or union wage). Or worse, that couple buys privately and squeezes the agent out of 2 years of service. So why does the public gripe when that same agent actually puts something together in a couple of days? That agent still has to babysit the deal to the end, still likely taking over a month or two. It is a rocky road these days keeping deals together! The public is so insulated from what agents do.

    And lastly: This industry is primarily a service industry. But, to survive, agents have to look for work every single day of their lives. No E.I. for them. There are no picket lines for them. Imagine if real estate agents went on strike?
  • Wayne Ryan | 02 Dec 2014, 04:57 PM Agree 0
    In response to the uninformed soul questioning Realtor expenses. While everyone's expenses will be different, here is a basic breakdown of mine. This is based on approx. 40 sales for the year.
    Desk Fee - $7500
    Deal Fee @ $150. per - $6000
    MLS Fee @ $100. per - $4000
    Board Fee - $720
    Website fee - $600
    Client Software - $600
    Lockbox Key - $150
    Mandatory Education - $300
    E&O Insurance - $1000
    Cell Phone - $2000
    Car Payment - $7200
    Gas - $3600
    Client Lunch - $1000
    Licenced Assistant - $50,000
    General Marketing - $25,000

    I don't list these expenses because I'm complaining...I love what I do and I make a good living at it BUT.... it's a business and it has business expenses like any other. Just food for thought!
  • Bloated | 02 Dec 2014, 05:23 PM Agree 0
    Please go on strike you are not that special..something else or someone will replace u!!!!! People will see how simple it would be and see how much money or time they could save.

    If sellers/buyers had the access to the monopoly of information( they do in the US) of sold properties. They could list with a little data in-puting online, see what to hold out for on sale, call their lawyer to review or ask questions ,pay hinmm a few hundred more.. Done deal!!!

    Stop with the whinniing how much work is done, I know plenty of jobs,businesses that work their butts off but don't charge 10,000-30,000 for a little on-line paperwork,tour service or taxi service..Or negotiate/shoot for similar sold units/properties...more rocket science

    Just my point who needs to pay for all that ridicuolous ,Over stated , bloated overhead..when the job can be done for $$1,000.00 .
    They say they drove around ,buyers "an agent who has been assisting the same couple for over 2 years trying to buy something".that is how they justify $20,000!!!!! he picks a example that can happen with anything in life...EXCEPTIONS!!

  • Wayne Ryan | 02 Dec 2014, 05:49 PM Agree 0
    My My Mr. Bloated... you certainly have your shorts in a knot. Please, by all means... sell and buy on your own for God's sake... nobody really cares what you do. Some people can build their own homes and some hire builders. Some do their own taxes and some hire accountants. Some can do their own legal work and some hire lawyers. You keep bleating on about lawyers. A lawyer who takes a case on contingency, which is what a Realtor does, charges about 30 - 40%. I'm not sure why I waste time talking with someone who doesn't have the courage to use their own name but there you have it. I suppose the one positive is that if you sell/buy on your own it will save some poor Realtor the trouble of having to deal with you:) I will end by saying the same thing I tell everyone who feels that real estate is an easy job and that agents are way over paid...why don't YOU do it then??
  • ECRE | 02 Dec 2014, 08:15 PM Agree 0
    Buyer's agents do NOT work for free. Biggest fallacy AND myth out there. HOW much a buyer's agent is paid is directly influenced (and 'influence' is perhaps the best term here) by the listing contract between the seller and THEIR agent, but the money comes from the proceeds of the sale, which comes from.... yes, the buyer! Disregarding the contractual routing of the 'pay', in essence for any real estate transaction with an MLS-posted cooperating fee involved, the buyer pays X, the seller nets Y, and the difference, IE realtor fees, is roughly 'split' between the buyer and seller. Put on a buyer's hat for a second: why would you want the listing agent and the seller IN ANY WAY influencing or controlling the compensation YOUR representation is being paid? Every time I pose this question to my buyers, they can't WAIT to sign an Exclusive Buyer's Agency contract that sets my fee specifically as negotiated between us. If the cooperating fee being offered is less, my buyer pays the difference, and if it's more or there's a bonus, it's kicked back to the buyer.f

    Value for services: in my neck of the woods, the most popular competitive fee breaks down to roughly 3% (7% on 1st $100k 2.5% on balance) for most sales, usually split between buyer agent and listing agent. So if the seller and buyer, per my previous point, see themselves as responsible for 'sharing' this gross amount, then each is paying their agent roughly 1.5%. A client should feel that their agent can protect their best interests and save or make them at least as much as the $$ going in their agent's pocket, in addition to the value of counsel, timesaving, etc.. If they don't, then that's not the agent or fee model for that client... and in my books, that means "next" for both myself and the prospect! There's a business and fee model for everyone, to each their own. Even for 'Bloated'...
  • Tour Guides | 02 Dec 2014, 10:09 PM Agree 0
    ECRE,

    Sure is a gifted in making it sound like rocket science!!
    Search if listing has been listed before,copy info,take pics, wait for tours,shoot for previous sales prices from offers . Pick up cheque....that is ECRE grand explanation summoned up in laymans terms.

    All buyers/sellers are just paying for a bloated,dinasour,over charged,fees,advertising,ego,monopoly model. They will spin it with all kinds juicy stuff "if it wasn't for us the real estate market would crumble"!!

    Travel agents said this
    Stock brokers said this
    Taxi services are saying this

    BUyers and sellers stop the madness and keep ur money. They inflate the market with bully tactics ,listing below market to create a frenzy for multiple offers and they call this professionall realtors....



  • | 02 Dec 2014, 11:25 PM Agree 0
    If it's so easy, then please, by all means. Go get your license and do it. Most can't make it because it IS hard; many get out because they can't take it.
  • Mr. Change | 03 Dec 2014, 06:54 AM Agree 0
    The funny thing is you do not need a license to sell a home. Sell privately using one of the online programs like ComFree or PropertyGuys and you will see what it takes. It is no where close the amount of work people would equate to the amount they have to pay for. It does take some work, but it is not what realtors make it out to be. If you live in the GTA area where the listing prices are sky high, agents are making more per hour than top surgeons. Any you wonder why the public thinks this business model is broken. You can see the fear in the industry is rising because CREA keeps running scare ads on TV every year warning people not to sell without an agent. They are doing this because the industry itself sees this is starting to fall apart and they are trying to keep it together long enough to make enough money on their way out. Technology is changing all industries and real estate is next in line.

    The realtor who listed all the expenses above - you really have to be kidding me right? This is a justification of charging your fees. That would be the same a chef at a restaurant complaining about the high cost of raw food they must purchase from the local grocery store to produce a meal. Guess what, they don't shop at grocery stores, they show wholesale and direct. Technology is bringing this to real estate. Your industry is accustomed to taking a cut of the clients pie because the slice was so large. Because of this, each of the realtors are told and must try to keep their fees high or else the whole industry loses their slice.

    I find it amusing that people still debate this. In my area, all agents say they will never drop their fees in public but when you talk to them in private they bend over backwards as soon as you tell them you are no interested.

    The reason there is so much competition with agents is that so many people see this industry as a cake walk that you can make easy money for little work. I don't completely believe this, but the fees from 20 years ago no longer make sense. Your services are not worth that kind of money.

    I really think there is a model for flat fee and adding on additional services to the flat fee. If people on this forum stopped trying to keep the model as is and spent their energy on trying to come up with a new model, we could likely be there. Go figure it out. It's not that complicated if you let go of the old model.



  • Mr. Change | 03 Dec 2014, 06:54 AM Agree 0
    The funny thing is you do not need a license to sell a home. Sell privately using one of the online programs like ComFree or PropertyGuys and you will see what it takes. It is no where close the amount of work people would equate to the amount they have to pay for. It does take some work, but it is not what realtors make it out to be. If you live in the GTA area where the listing prices are sky high, agents are making more per hour than top surgeons. Any you wonder why the public thinks this business model is broken. You can see the fear in the industry is rising because CREA keeps running scare ads on TV every year warning people not to sell without an agent. They are doing this because the industry itself sees this is starting to fall apart and they are trying to keep it together long enough to make enough money on their way out. Technology is changing all industries and real estate is next in line.

    The realtor who listed all the expenses above - you really have to be kidding me right? This is a justification of charging your fees. That would be the same a chef at a restaurant complaining about the high cost of raw food they must purchase from the local grocery store to produce a meal. Guess what, they don't shop at grocery stores, they show wholesale and direct. Technology is bringing this to real estate. Your industry is accustomed to taking a cut of the clients pie because the slice was so large. Because of this, each of the realtors are told and must try to keep their fees high or else the whole industry loses their slice.

    I find it amusing that people still debate this. In my area, all agents say they will never drop their fees in public but when you talk to them in private they bend over backwards as soon as you tell them you are no interested.

    The reason there is so much competition with agents is that so many people see this industry as a cake walk that you can make easy money for little work. I don't completely believe this, but the fees from 20 years ago no longer make sense. Your services are not worth that kind of money.

    I really think there is a model for flat fee and adding on additional services to the flat fee. If people on this forum stopped trying to keep the model as is and spent their energy on trying to come up with a new model, we could likely be there. Go figure it out. It's not that complicated if you let go of the old model.



  • UBer Change | 03 Dec 2014, 09:29 AM Agree 0
    Mr. Change said it much more poetic than I have in the pass and right on the button . They are trying to promote like you said with ads to keep the high fee model going because with lots of agents leaving or not signing up dreaming about being a taxi/tour gudie(for big commissions) their monthly dues/fees would dry up too. Funny, I said the same thing how they justified their commission as if no other business model has costs/overhead etc!!!
    The agent said it perfectly how many fees,boards,orgnizations,dues we are paying and for what!!!? I remember stock brokers would charge a fortune and their stock info was sacred..now u can trade for pennies and all that info(historical prices,graphs,announcements etc) is available for free .

    The Realtor will be a fossil soon. New software/flate rate services to trade realestate will come and unfortunately it will stop the high commission realtor. electronic signatures, lawyers reviewing purchases, negotiators online, etc.. complete virtural tours of properties will be the norm...at least Uber is coming to help out agents who have taxi experience when the bubble bursts
  • EGO | 03 Dec 2014, 09:53 AM Agree 0
    All u buyers / sellers Use a flatrate realtor service and keep ur money.

    They charge 95% less for listing or buying with the same results and no EGO. Don't let the high flyer fool you with "they get better results"..all services has their ups and down ,failures, etc... watch outfor bias ,self promoting stats..even bell Canada is under fire by the competition bureau with false reviews..

    eager you keep ur money or pay for the EGO
  • DZZY | 03 Dec 2014, 10:13 AM Agree 0
    It is economy of scale. There are a lot of realtors. Good for consumers as this brings the costs down.That is how the free economy is supposed to work. There are options and competition for a consumer selling a property. As for education that is a joke. A person can become a realtor with no education. That is why there are so many realtors. Do you need a degree from a credited University or College? No. Do you need a high school diploma ? No. Do you need an elementary education ? No. Real estate training consists of paying to attend a seminar where an instructor will speak about over coming objections to acquire the business. As for mandating that a consumer use a licensed realtor to facilitate a transaction it would be more likely that would be a job for a lawyer. Lawyers already are responsible to facilitate the sale once an agreement is reached. There are already engineers working on programs and aps to bring buyers and sellers together. Commissions are high. $20,000 for a $400,000 dollar property. Plus 13% HST. $40,000 for an $800,000 dollar property. Dose the higher priced property require more work then the lower priced property? I guess the agent doing open houses can wear more expensive clothing. Having said all that the mls systems are valuable. This is where all the for sale by owner companies suggest a consumer go to get the information they need. Without realtor.ca where would a consumer get the information? The service realtors provide is valuable. From setting appointments, showing properties, qualifying buyers, referring buyers and sellers to other services they need. Knowledge of neighbourhoods and setting values. Realtors need to better control the information. Make realtor.ca a pay for use site unless a client is under a contract with a realtor. The money can be used to offset the cost realtors incur by providing this free site to consumers. In closing when realtors give so much away free what do they expect when it comes to being compensated for their services.
  • ECRE | 03 Dec 2014, 02:14 PM Agree 0
    Here's some examples of how an ethical, professional realtor earns their value.
    -Keeping a client from buying a leaky condo
    -Ensuring a client is confident that they didn't pay too much or accept too little when they made that massive purchase or sale: IE, taking the time/effort to counsel on how to interpret the numbers and market, instead of just, "It's a great price, take it!"
    -Being able to advise immediately that that darling house the client has fallen in love is going to have mall built accross the street in a few years. (vs. them finding out after having bought: "Hey, didn't the FSBO seller know that...?!!!". Probably not, but a good local realtor would)
    -Finding out BEFORE you commit to a condo purchase that the building you want to buy into has been trying to change the bylaws to your personal detriment (EG, you want to be able to rent, but building, as evidenced when properly reviewing/interpreting strata history, is clearly becoming less 'rental friendly')
    Those are the types of reasons someone hires an agent, and those are the things many clients of good agents have ended up being thankful for. What it costs an agent to be in business is completely irrelevant to the consumer: what IS relevant is the value of the service. If I know very little about fixing my car's brakes, I'm going to pay an expert so that I know it's done right, because if I do it WRONG, the 'cost' will be immeasurably higher than any savings. What's that service worth? Whatever the market will bear, and I couldn't care less about the brake shop's overhead or cost of their fancy Mac tools.
    Problem is, in our business, the barrier to entry is incredibly low, and brokerages like it that way: easy to get a license = more agents = more fees. The public doesn't touch real estate very often, so they're not generally aware of this overall 'condition'. In my area, there's over 10,000 agents, and in my previous office of over 200 agents, more than 25% 'turned over' every YEAR (IE new or quit industry). So, are there lots of licensees that are not adequately prepared, educated, or 'mentored' enough to provide the service that most are paid for, and expected to deliver? Absolutely. Does that diminish the value of those that have been hard-working, ethical, and persistent enough to deliver on what the public SHOULD expect from such a sensitive service? No.
    Seriously, the point isn't how much commission is paid (though it's somewhat relevant), it's about how much went out of or into your jeans when buying or selling a property, at the end of the day, as a net of all expenses, etc.. If you price your property for $600,000 on your own and it sells right away, you'll feel great: BUT, if the next 3 like it sell for $640,000, suddenly the 'savings' don't look so great. And then, if the buyer comes back and sues you because you 'ought to have known' there's a contaminated oil tank on your property... There's a clear dollar value in that valid scenario, and a clear 'avoidance of risk' value. That's not rocket science. Some people legitimately aren't better served by having an agent, absolutely, but some people are.
  • Brake JOB | 03 Dec 2014, 02:45 PM Agree 0
    I think the brake industry should add brokers,agents, boards who will guide them to the best brake job ....which is still not guarantee it will be the best brake job....tack on few thousand for each brake job to pay all the middleman..... sounds fair

  • Wayne Ryan | 03 Dec 2014, 03:02 PM Agree 0
    I had a client who was a pretty savvy business man. He'd purchased two houses, each for about $750,000 with the idea that some family members would reside there. In approx. a year things changed and he wanted to sell. He initially called me and was going to go FSBO and I said great, if you can save some money by all means go for it. About 2 weeks later he called and said he was too busy at work and wanted me to list them. He told me he was going to throw them on the market for $850,000 each. I did some research and also knew there was a flood of Asian buyers coming into the area due to some changes in policy taking place in Hong Kong. I suggested we list them at $950,000 for one and $975,000 for the other. We sold both within 30 days, one for $930,000 and one for $$950,000. I don't think he begrudged me one cent of the commission:):) Almost every Realtor has some version of this story... how their knowledge and expertise saved a client money, problems, law suits etc. Again, I stress... to each his own. I admire anyone who can take the time to sell their own property but there are a lot of folks who just don't want to do that and who value what their Realtor brings to the table. If you don't then fine, do your own thing. List your own place, do your own advertising, set up your own showings, meet all the potential buyers at various hours of the day, meet all the various sellers at various hours of the day, pre qualify buyers, go to city hall to check out permits, arrange your own financing and house inspections, negotiate face to face with the buyer on price, possession dates, included items, clauses and terms, do your own contracts, addendums, subject removals, arrange for handling of deposits and do all of that without getting sued because you didn't know what you had to disclose or being taken advantage of because the seller didn't tell you things they were supposed to. Hell, it's really all a snap:)
  • Braggers | 03 Dec 2014, 05:05 PM Agree 0
    Ryan,

    I wouldn't bragg about ur accomplishments all u did was inflate the market,push a regular buyer out of reach of a home and paid urself a hefty fee.. thank goodness for realtors...bragging,inflating the market,pushing the hard working local buyer out of reach...my hero!!



  • Wayne Ryan | 03 Dec 2014, 07:45 PM Agree 0
    Again... another cowardly Internet Troll who won't use his name and spews the usual hatred... totally glad I don't have your life such as it is:):)
  • PEACOCKS | 03 Dec 2014, 08:33 PM Agree 0
    Peacock,

    Buyers and sellers listen to Ryan the peacock if ur not a roller he will look down on ur life and snicker.

    As expected name calling and more ego....you sound like you cured cancer with ur tour guide./taxi service/model that inflated prices with overseas investing... the market conditions/monopoly and overseas investing not ur genius is selling the market

    Glad we got ur pushing for inflated prices with ur bloated commissions and high fiving inflated prices... so proud and u are my hero!!!

    Make sure u tell the first time buyer the reason why it is harder to get into the market.... you have to pay the roller agent for his bloated commission and the inflated prices pushed up by oversea money... Harry's is having a suit sale make sure u get 2 or more suits
  • Wayne Ryan | 03 Dec 2014, 08:49 PM Agree 0
    You know I'd love to stay and enjoy this little battle of wit but since you appear to be unarmed, I'll simply again point out the lack of name or ID and give your comments the weight they deserve. Now I have to go and make another huge commission... Christmas is coming!!
  • cutey realtors | 03 Dec 2014, 10:31 PM Agree 0
    ryan,

    you are so cute and remember with Uber here that Taxi experience u have is a back-up
  • Inflated Commissions | 07 Dec 2014, 02:58 PM Agree 0
    All these HIGH ROLLER ,OVER CHARGING AGENTS are doing is inflating the prices with their inflated commissions and they egoing the buyers from overseas with inflated prices....all they have done is push the burger flipper and 1st time home buyer, new family who can never get near buying a house...they walk around like peacocks ..this was their accomplisments and they have pushed the affordability so far out of reach so they can buy new suits ...
  • rocket | 07 Dec 2014, 03:27 PM Agree 0
    Hey Laura,

    So even a 1% commission is earned then too, right. Or a mere listing. Not that I charge that amount or do mere listings but I am sticking up for people who for whatever reason have a different business model. Its funny reading these and seeing how agents are desperately trying to justify their lifestyle.
  • Pay 2000 total | 07 Dec 2014, 05:52 PM Agree 0
    Not one agent has proved or justified 5% if they charge that...no one should pay more 2000-3000 total and the service will be the same
  • Keep UR MONEY | 08 Dec 2014, 09:36 AM Agree 0
    Ask ur agent to lower his commission( 1,000 for listing and 1,000 for buying) and if not keep searching till u find one .. there are plenty of great services that will perform and get the same results...keep ur money for closing costs,legal fees, unexpected costs ,,,
  • PoeticLicense | 08 Dec 2014, 09:53 AM Agree 0
    I had a great 16-year career in airline sales management prior to real estate.
    Whenever I had to fly, as a management employee, I was offered the spare seat in the cockpit. Looking at the back of the captain, I could never help the thought "wow, this guy looks at his dashboard, everything is computerized, he literally has nothing to do most of the flight, other than take off and landing, and yet he earns $250,000."
    When a great Realtor, because of his or her knowledge, expertise, or skill sells a listed property right away, does this diminish his value in the eyes of consumers -or worth- fellow Realtors? in this analogy, it would be the same if the captain of an airplane didn't get paid "every time the plane landed safely and ahead of schedule". The skill of pricing a property correctly and the proactive efforts of Realtors is what gets properties sold.
    In marketing there's an expression called "F.U.D." : creating fear, uncertainty and doubt. Agents' value is pushed to the fore-front when there are problems. Unfortunately the consumer has NO idea of everything that is involved and I believe we Realtors need to educate the consumer regarding what can go wrong in a real estate transaction that causes a transaction to fall apart, sometimes on closing day, i.e. the Sellers owe more than the home is worth, the Buyers lied on loan app, the inspector does a bad job (failed to see the furnace is about the blow up) and the list goes on.
    I want to know what that deep discount agent does when the you-know- what- hits-the-fan and the deal is about to -or has- blown up on completion day, as it happened to me more than once in my 25-year real estate career. In both cases I was the Sellers Realtor and it was the Buyers Realtor' client who bailed.
    Just like that airplane pilot or a great doctor, or lawyer or tax accountant: you only know when you have a great one when things go wrong. When that plane loses altitude... that's when the pilot earns his wings and his paycheque, correct?
    In my opinion we're still doing a lousy job at educating the consumer as to the value of a good Realtor because the public has no idea what a good Realtor does and what a 'bad' Realtor does not do.
  • Bloated Ego | 08 Dec 2014, 12:57 PM Agree 0
    Of course nothing ever happens with the seasoned /expert agent ! ?

    Stop the comparisons to Doctors,lawyers,airline pilots....u are a salesman and can be replaced with a 3 month course and without a high school diploma.

    Not rocket science, Check comparables , post the listing,sit back wait for the 30,000 agents who may book a tour, hold out for comparables sold prices....pay me 20,000- 50,000???? all the rest is the inspector if needed, lawyer to close/transfer,banker for the finance...we should pay them 20,000-50,000 too????

Post a reply