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Will this new technology kill commissions?

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Real Estate Professional | 14 Nov 2014, 09:28 AM Agree 0
It’s being billed as an innovative transformation of the online brokerage, but buyers’ agents may struggle to accept – let alone embrace – the terms that come with it.
  • Jeffrey Joseph, Broker | 14 Nov 2014, 11:50 AM Agree 0
    Having been a Realtor since 1968, I have seen my fair share of commission issues. One that stands
    out in my mind, is the Seller who listed with someone else because of probably a 1% lower commission
    rate. In my opinion, the Seller left more than 5 times the amount of money on the table, because I know
    the Realtor will not spend the time to negotiate hard enough, and most likely because of the reduced
    amount of the listing end of a commission.

    The Sellers saved 1% = $13,000, but didn't get $75,000 they deserved. Quality representation is worth
    something extra.

    Jeffrey Joseph, Broker
    Harvey Kalles Real Estate Ltd., Brokerage
    Toronto
  • Jaycee | 14 Nov 2014, 12:04 PM Agree 0
    Been in this industry for over 30 years. Ever since I got my real estate license I began reading and hearing complaints about 'high commissions' in this industry. Since then, I've seen hundreds of companies offering alternatives come and go.

    Most of the newcomers bent on saving the public from this "outdated fee structure" have never had a real estate license, and consequently have not worked with sellers or buyers on a regular basis.

    Real estate agents get paid for providing a yet to be improved MLS system, for their localized knowledge and mostly for being able to able to deal with highly emotional and often irrational buyers and sellers.

    Lawyers could have easily taken over the industry. Appraisers, home designers, mortgage specialists, banks, home inspectors and professional stagers have the tools and knowledge to create a service that would put all real estate agents out of work in no time at all.

    Why haven't they?

    One simple answer; they are not willing to put up with those "highly emotional and often irrational buyers and sellers" on a daily basis. "Ideas are a dime dozen, but those willing to put them into practice are priceless", Joe Gandolfo PhD.
  • Frieda Nagel | 14 Nov 2014, 12:13 PM Agree 0
    I work as a deal secretary for a brokerage. You may hear chatter about the commission BUT on my street there have been 3 recent listings - 2 with brokerages the other went with Property Guys. Cool. Thing is the tow brokerage listings sold in around a week while Property guys listing has now moved to a brokerage.
    That says alot
  • Jaycee | 14 Nov 2014, 12:24 PM Agree 0
    Property Guy and all the others believe that being able to find information on the internet is all it takes to sell a home. They so naively overlook the other part of the equation ...the people side of it.

    That aspect of it is what NO ONE is willing to face day after day. Having 'root canal' is fine. Having regularly? I don't see too many volunteers.
  • Dustin Graham | 14 Nov 2014, 12:38 PM Agree 0
    The commission debate is nothing new and it will always continue to be challenged by some. The reality of the matter is that sellers will always make more money by being properly represented by a qualified and experienced Realtor. These new ventures sound nice at first glance but they rarely work long-term. Property Guys is a good example of this. In my market there was a strong push by discount and FSBO companies. Truth be told, it worked for a while, but the last couple of years we've seen a dramatic decline in consumer confidence in these models. Sellers have begun moving back to the traditional approach of using a full service realtor as a tried and true model. It's our job to sell based on value, not what commission we charge.
  • Ray Vella | 14 Nov 2014, 12:43 PM Agree 0
    We always run into the issue of commissions, it is my firm belief in my experience that higher commissions draw higher sale prices. It really is not important what the commission rate you pay is, it's what you net. Discount brokers give up a sale way too easily. I always charge top dollar and pay top dollar and I always get the best price possible. That what my client is paying me for. Do the best job you can for a fair price and let the other brokers worry about how they are going to scam the public. Maybe someone should do a study in how expensive this business is when it is done properly, then maybe the general public will think twice about complaining about how much real estate agents make.
  • Bruce | 14 Nov 2014, 12:53 PM Agree 0
    This year I used an agent to sell and to buy. The agent I used to sell was not just useless but actually so bad I feel she cost me 10k or 20k. On the other hand, the agent I used to buy was so good that I feel she saved me or earned me far more than the person in my second sentence lost me. The lesson: Don't worry about stupid schemes, 'technologies,' fast-talkers; just earn your commission, do you job well, go a little beyond, keep the lines of communication open, care about your buyers and sellers, etc. Realtors are often referred by word of mouth and we all know that isn't going to happen to the person in my second sentence. The person in my third sentence has already been recommended by me at least 5 times and will be many more times in the future. The realty business is about people not technology.
  • Eddie | 14 Nov 2014, 01:11 PM Agree 0
    Collusion. Cartel. Commissions too high. Urgh. I'm tired of media quoting shallow minded, self serving........(fill in the blank yourself). Maybe McDonald's, Burger King and Wendy's are in collusion too? This is dumb. I work my ass off to earn a living. I don't live in a castle and don't own an air plane. Who gave this jerk the right to pass a judgement on how much I earn and whether it's too much or not.

    Now let's talk about people who are selling or buying the largest investment of their life. No website in the world will substitute a real property and a professional agent. The cheapskates will always find a way to cut corners to save a penny, while loosing a dollar. I welcome them to play with their iPads, if that is what makes them happy. I wouldn't want them as clients, anyway.
  • Dying Industry | 14 Nov 2014, 02:31 PM Agree 0
    Eventually buyers and sellers will be more educated,resourceful and will do more research when the monopoly of TREB is forced to open the info they hold . All agents are scared,trembling ,screaming ....if they were so confident in their abilities they would let any type of competition. If I had a monopoly on information how smart would I be too!! They want landtransfer tax reduced which is shared by the whole city as benefit for all tax payers but don't touch my commission which they keep for themselves.

    Never had a agent justify 20,000-50.000 of commission with anything except I work hard behind the scences. 90% of their work is a tour guide,administration(paperwork),chaufeur,...they complain that having accurate info is mostly up to home owners ..the listing they post is so limited , for that kind of money consumers should get a book of info on the property,

    No wonder the industry is so saturated with agents because it is a money maker for treb to license agents who pay fees./courses .. everyone wants to become a agent to make tremendous money being a tour guide,chafeur etc..no wonder they are lining up. I see why treb is holding onto these high commissions because nobody would be lining up to be agent if the commission was $1000.00

    The stranglehold is loosening and the cry babies don't want to work hard
  • Neil | 14 Nov 2014, 02:33 PM Agree 0
    There is too much focus on commissions from people outside the industry. They look at a number and think, "That's too much". They have no understanding of monthly fees (for me about $1,150). Errors and Omissions Insurance (for me $50 per month), Printing, Advertising, Annual Dues, Listing Costs, Web Sites, Computers, Printers, Mail outs, etc., etc. And lets not forget about all the clients one works with and spends time on who in the end, don't sell, or don't buy. Once you take all of this into consideration, the commissions are just about right! If there was a $2,000 commission paid on every sale or every purchase, most Realtors would have to look for another career, it just would not be worth it! In the end, as Bruce points out above, the Real Estate Company doesn't matter so much, it is the Agent you use that will bring home the bacon! I have personally seen a discount brokerage Realtor sell a home in one day that had sat on the market with a large company for almost a year, simply because the large company Realtor wouldn't do Open Houses. When the Discount Realtor took over she held one Open and the Home was double ended to a visitor to the Open.
  • judy | 14 Nov 2014, 02:36 PM Agree 0
    Too much, huh? No pension, no benefits, paying through the nose to go to work every day, and no regular hours or paycheques........ You have to love this business to persevere. It takes a "nerd" to come up with the idea we make too much.
    In our area discount brokers don't like selling their own listings, it is the "full commissions" that we negotiate that keep them in business.
  • Al | 14 Nov 2014, 03:32 PM Agree 0
    I like how a lot of the comments here are from agents/brokers trying to justify what they do. Honestly any intelligent person with some common sense and maybe a little knowledge about properties could do what you do. I have used agents in the past to buy and sell properties but found them all useless. What do you really do for us anyway that would be considered special that we can't do for ourselves with all the tools we have at our disposal? (That was a rhetorical question for all those who are looking to start replying to this post). I know how sensitive you can be but honestly think about it, other than filling out paperwork and making some phone calls what do you really do? Find us properties using the same tools we have at our disposal? Come with us to properties we can go to ourselves or if we are selling put our listing up which we can also do ourselves. Anyways I can go on all day about how any average person can do what you do but let's get back on topic. $2000 Flat rate and a 1% Commission to a middle man is just as laughable as the comments I read which made me have to post this. All I have to say is to any potential home buyers/sellers is that all you really need is a honest inspector, good lawyer and use the tools available to you to be able to find/sell the property you want. The rest in between is paperwork which also does not take a rocket scientist to fill out as I've seen plenty of agents with "lots of years experience" mess the simplest things up. Oh and if you really want you can just get your own license which wouldn't take much effort and less money than paying an agent/broker. Have a good one and best of luck with your future endeavors
  • Tourguides | 14 Nov 2014, 03:47 PM Agree 0
    Agents are like teachers , government,unions ,corporations once they have power,control,money ,legal power don't even think about bothering us...
  • Ken | 14 Nov 2014, 05:30 PM Agree 0
    I can't believe how everyone seems so hung up on Real Estate fees, which really is a necessary part of the industry existence. I am pretty sure that any Realtor doing any type of Real Estate business has some type of expense like; office fees, local board fees, advertizing fees, internet fees, vehicle expense, etc. etc. all forming part of the functioning and operation of the industry. The main reason that property owner's properties have an attached approximate value to there property is because the REAL ESTATE INDUSTRY exists due to collection of regular board fees from the Realtors. These fees are used to provide office space and pay wage earning staff to manage and operate the industry's detail information and stats. Without this information property values including mine, and I have been a Realtor for over 30 years, would have no real proven value. Maybe the whole Real Estate Industry should just shut down for a few months and let us property owners figure out our on property value, which would be real scary for Banks and appraisal companies.
  • Old timer | 14 Nov 2014, 05:43 PM Agree 0
    Any Realtor worth their salt believes they are worth the overpriced commissions. And so they should. It's called 'self esteem'. In many cases this is true. In an equal amount of cases it is not. After 40 years in the business I too have seen the 'discount' houses come and go. Like any serious changes to an industry, a judicial system, a school curricular, etc. changes do take time. Changes have to be worked through by 'trial and error'. It is my belief fixed commission within a company will be a thing of the past soon. Lower commissions are here to stay now. The public wants it. I don't wish to agree that a dedicated Realtor with ethics and accountability will shirk their duties and provide inferior service based on a commission rate. My mission and desire has always been to provide first class service to all my clients, and this applied whether the commission rate was high or low, and whether the property to be sold was expensive or a simple park trailer. That is how great reputations are born. Any one who believes differently, simply do not last in this business. Firms that fail to recognize the evolution of commissions will also fall by the wayside. That is why companies like 2 Percent Realty is one of the fastest growing realty companies in Canada now. Their agents average over $115,000 per year income. Not bad. How many 'franchise' offices can boast this record for their salespeople. My advice has always been: Don't be the first to try it (do it) and don't be the last to leave it!"
  • Old timer | 14 Nov 2014, 05:44 PM Agree 0
    Any Realtor worth their salt believes they are worth the overpriced commissions. And so they should. It's called 'self esteem'. In many cases this is true. In an equal amount of cases it is not. After 40 years in the business I too have seen the 'discount' houses come and go. Like any serious changes to an industry, a judicial system, a school curricular, etc. changes do take time. Changes have to be worked through by 'trial and error'. It is my belief fixed commission within a company will be a thing of the past soon. Lower commissions are here to stay now. The public wants it. I don't wish to agree that a dedicated Realtor with ethics and accountability will shirk their duties and provide inferior service based on a commission rate. My mission and desire has always been to provide first class service to all my clients, and this applied whether the commission rate was high or low, and whether the property to be sold was expensive or a simple park trailer. That is how great reputations are born. Any one who believes differently, simply do not last in this business. Firms that fail to recognize the evolution of commissions will also fall by the wayside. That is why companies like 2 Percent Realty is one of the fastest growing realty companies in Canada now. Their agents average over $115,000 per year income. Not bad. How many 'franchise' offices can boast this record for their salespeople. My advice has always been: Don't be the first to try it (do it) and don't be the last to leave it!"
  • Old timer | 14 Nov 2014, 05:44 PM Agree 0
    Any Realtor worth their salt believes they are worth the overpriced commissions. And so they should. It's called 'self esteem'. In many cases this is true. In an equal amount of cases it is not. After 40 years in the business I too have seen the 'discount' houses come and go. Like any serious changes to an industry, a judicial system, a school curricular, etc. changes do take time. Changes have to be worked through by 'trial and error'. It is my belief fixed commission within a company will be a thing of the past soon. Lower commissions are here to stay now. The public wants it. I don't wish to agree that a dedicated Realtor with ethics and accountability will shirk their duties and provide inferior service based on a commission rate. My mission and desire has always been to provide first class service to all my clients, and this applied whether the commission rate was high or low, and whether the property to be sold was expensive or a simple park trailer. That is how great reputations are born. Any one who believes differently, simply do not last in this business. Firms that fail to recognize the evolution of commissions will also fall by the wayside. That is why companies like 2 Percent Realty is one of the fastest growing realty companies in Canada now. Their agents average over $115,000 per year income. Not bad. How many 'franchise' offices can boast this record for their salespeople. My advice has always been: Don't be the first to try it (do it) and don't be the last to leave it!"
  • Old timer | 14 Nov 2014, 05:45 PM Agree 0
    Any Realtor worth their salt believes they are worth the overpriced commissions. And so they should. It's called 'self esteem'. In many cases this is true. In an equal amount of cases it is not. After 40 years in the business I too have seen the 'discount' houses come and go. Like any serious changes to an industry, a judicial system, a school curricular, etc. changes do take time. Changes have to be worked through by 'trial and error'. It is my belief fixed commission within a company will be a thing of the past soon. Lower commissions are here to stay now. The public wants it. I don't wish to agree that a dedicated Realtor with ethics and accountability will shirk their duties and provide inferior service based on a commission rate. My mission and desire has always been to provide first class service to all my clients, and this applied whether the commission rate was high or low, and whether the property to be sold was expensive or a simple park trailer. That is how great reputations are born. Any one who believes differently, simply do not last in this business. Firms that fail to recognize the evolution of commissions will also fall by the wayside. That is why companies like 2 Percent Realty is one of the fastest growing realty companies in Canada now. Their agents average over $115,000 per year income. Not bad. How many 'franchise' offices can boast this record for their salespeople. My advice has always been: Don't be the first to try it (do it) and don't be the last to leave it!"
  • Old timer | 14 Nov 2014, 05:46 PM Agree 0
    Any Realtor worth their salt believes they are worth the overpriced commissions. And so they should. It's called 'self esteem'. In many cases this is true. In an equal amount of cases it is not. After 40 years in the business I too have seen the 'discount' houses come and go. Like any serious changes to an industry, a judicial system, a school curricular, etc. changes do take time. Changes have to be worked through by 'trial and error'. It is my belief fixed commission within a company will be a thing of the past soon. Lower commissions are here to stay now. The public wants it. I don't wish to agree that a dedicated Realtor with ethics and accountability will shirk their duties and provide inferior service based on a commission rate. My mission and desire has always been to provide first class service to all my clients, and this applied whether the commission rate was high or low, and whether the property to be sold was expensive or a simple park trailer. That is how great reputations are born. Any one who believes differently, simply do not last in this business. Firms that fail to recognize the evolution of commissions will also fall by the wayside. That is why companies like 2 Percent Realty is one of the fastest growing realty companies in Canada now. Their agents average over $115,000 per year income. Not bad. How many 'franchise' offices can boast this record for their salespeople. My advice has always been: Don't be the first to try it (do it) and don't be the last to leave it!"
  • | 14 Nov 2014, 05:49 PM Agree 0
    It's really simple folks. Next time you have a Buyer client show them a house listed by Property guys then ask them if they (Seller) don't pay the 2.5% commission that states on the Buyer Representation Agreement it will come out of your pocket. What do you want to do? See how many of those Buyer client will pay out of their pocket. End of story!
  • | 14 Nov 2014, 05:53 PM Agree 0
    There is no question that anyone is able to post a listing and to look at homes themselves. The real value that an experienced agent brings to the table is their ability to negotiate. Many agents have years of experience negotiating many transactions and several invest considerable time and money honing their skills purely for the benefit of their buyer and seller. In 35 years I have seen a number of these flat fee and discount operations fail, and the real reason is because of they do not provide what the consumer really needs. Perhaps, if you are an investor that has negotiated a number of transactions yourself, you are self reliant. What about the over 90% of the market that are involved in one real estate transaction every 5 to 10 years ? It is easy to understand why they seek the expertise of a realtor. And, what about all of the people who have full time occupations ? Also easy to understand why they see the value of hiring a professional that can represent them 24/7. Getting a license does not give the holder experience. Just as the industry is changing, so too are the laws and regulations that affect the consumer. It makes sense to rely on a professional who is abreast of the changes. These are but a few of the reasons that intelligent people select, and willingly pay an experienced professional realtor that devotes all of their time protecting the consumer.
  • Jaycee | 14 Nov 2014, 06:34 PM Agree 0
    To all those unlicensed experts here who believe that all it takes to sell a home is to process a mountain of paperwork and a bit of negotiation skills. If you are so knowledgeable and capable, why don't you all get your license, make a truckload of money in your first year in the real estate business and then ...make it PUBLIC! Yes, public. Show the world how overpaid all real agents are. Talk is cheap.

    The world is so of full behind the desk experts who are never willing to get their hands dirty and do what other are willing to do.
    How many of you experts are willing to take the challenge and show all of us how easy is to make a boatload of money dealing with emotional and often irrational sellers, buyers, lawyers, bankers, home appraisers, home inspectors, mortgage brokers, contractors and home stagers to name a few, on a commission basis with no cozy pension plan or benefits?
  • Mark C | 14 Nov 2014, 06:38 PM Agree 0
    So far none of the comments in here have address the issue of lawyers and how most of them do not buy or sell homes without an agent. What does a lawyer need a real estate agent for? Why don't you go and ask them?
  • A Shep | 15 Nov 2014, 08:08 AM Agree 0
    no fee no help no-one works for 0% - Nothing is ever Free - low fees = low service
    like off shore goods - You get what you pay for -- When engaging low rates - you're bending over u know !!!
  • Bill Lafferty | 15 Nov 2014, 09:27 AM Agree 0
    If a seller offering little or no commission asked me "Would you not show my home if one of your buyers asked to see it? "

    My standard reply is "Yes. However one major consideration you are not factoring in, is that the vast majority of today's buyers are all under contract with their own Buyer's agent, therefore are liable for all or any shortfall of commission a seller is unwilling to pay. With buyers knowing that, may I ask, how many buyers do you realistically think are going to want to come, see, and make an offer on your home when they are under contract to pay your commission and you're not?
    Especially in view of the fact there are so many other sellers on the professional market all offering a realtor's full commission and sometimes even a bonus commission.
    Can you see, how by offering little or no commission this actually puts you and the sale of your home at a competitive disadvantage?
    By putting yourself at such a competitive disadvantage, this will end up costing you money, not saving you money. In fact, offering the right commission will make you money. Commission is not the expense most people think it is, it's a marketing tool. It can be like a powerful magnet or irresistible lure that attracts the most agents, the most showings and the best offers. Which in turn will result in a faster sale and put more money in your pocket which is your ultimate goal, isn't that right?
    Which is more important, saving a few dollars on a real estate commission or selling your home for the absolute highest price and thereby netting the most money possible?"

    If you fellow agents would like to learn more powerful replies I use that really work and make sense in order defend your commission income and overcome many more listing objections we currently face in today's difficult and challenging times. I would be pleased to help you.

    Contact Bill Lafferty Re/max Mountainview
    Sales trainer and coach for Jerry Bresser
    william.lafferty@creb.com (403) 835-9575
  • Bill Lafferty | 15 Nov 2014, 10:14 AM Agree 0
    Dustin, I couldn't agree more with your well stated comments.

    If Flat fee companies really worked and their selling system is so good, why is it they insist on being paid up front and not after a home is sold and closed like professional realtors do. The facts show over the past few years only 40 to 50% of these types of listings ever sell. Which means these flat fee companies are taking money from people and their homes don't sell using their system half the time if not more. If that isn't a rip off, I don't know what else is? Flat fee companies get sellers to focus on saving commission while they take their money up front and the seller is then left to find out the system only works 40-50% of the time.

    Professional Realtors on the other hand, invest their own money and time and effort up front in a seller's home and are only compensated by a seller for positive results, bringing them an acceptable offer for their home. Professional Realtors also know how to effectively negotiate the highest price possible for their seller clients putting more money in their pocket.

    Prudent sellers are now coming to this realization.
  • Monopolies | 15 Nov 2014, 10:15 AM Agree 0
    Typical when you can't convince sellers and buyers of ur services/expertise you make them sign a agreement that gives buyers and sellers no options that TREB has on their monopoly. Agents brag and tell you how hard they work/valuable but couldn't convince the consumer, so they make you pay them anyway...genius! Be nice if we all could make parties sign something to get paid on all services and goods we sell them regardless !!!!!!!!!!

    Rogers/Bell had that monopoly but the competition bureau took that away where you can cancel contracts now....rogers/bell use to say you don't like our service too bad pay us....agents are doing exactly what they did but a lot more money is involved.

    Now Rogers/Bell have to provide a service we are happy with and now they work harder for less money!!! Ask any agent if they ever complained there were fees to cancel roger/bells contracts!!!!

    Detached/semi market they created tricks for bidding wars on a product that teenagers could sell. Supply and demand 101 economics.




  • Mark C | 15 Nov 2014, 10:45 AM Agree 0
    Reply to 'Monopolies'. Your is the 'smartest' comment I've read here so far! The real estate industry "created tricks for bidding wars". Only a person with a faulty brian could make such statement.

    If TREB and agents created bidding war tricks, then the only conclusion one can draw is that those people living in depressed real estate markets are not too bright. Otherwise they could have simply copied the 'tricks' created by REALTORS here, and Voila, their depressed real estate market is gone!
  • cry babies | 15 Nov 2014, 11:35 AM Agree 0
    To Mark C,

    I will send you a contract to sign that if you don't like my comments you have to pay me anyway...typical when competition comes in the monopoly knocks the in- coming...if you were so confident in ur model why knock the competition..
  • Mark C | 15 Nov 2014, 11:49 AM Agree 0
    To Monopolies. Did I say a word about knocking the competition? Are those YOUR words or mine? As far I'm concerned, Bell and Rogers can do whatever they please. I was only commented on the brain lacking aspect of your comments.
  • Bill Lafferty | 15 Nov 2014, 04:35 PM Agree 0
    Hey Monopolies,
    Making the assumption that a home will sell for the same amount of money in the same amount of time regardless of who sells it, is a false assumption. Some agents consistently sell homes faster and for more money on account of their superior marketing strategy and powerful negotiating skills.

    To give an example, I just sold a home that had been with a major flat fee company listing for 40 days and the highest offer the seller received from a buyer's agent was $35,000 less than the offer I brought him after listing and selling the home in 4 days, in which I managed to negotiate$10,000 over the list price.

    Yesterday I sold another home that had been with a major flat fee company listing for 100 days with not a single offer. I managed to list and sell this home in 12 days for $900 less than the full list price.

    I also recently listed and sold a listing that had been previously with a major flat fee company who by the way charged them $1800 to put it on the MLS and had absolutely no success after several weeks of open houses. I not only managed to list and sell this home in less than 10 days, l managed to negotiate an exceptionally high price for the seller.

    These flat fee real estate brokers have the audacity to falsely accuse Treb as being a monopoly but in the mean time they take people for $1000 to $1800 up front preaching the fallacy that people don't need to hire a professional realtor and they can save commission. However, research shows these FSBO companies' success ratio is extremely low...but their incomes are in the millions of dollars.
    Professional Realtors on the other hand invest their own money and time and effort up front and only ask to be compensated if they bring their sellers an acceptable offer.
    These flat fee companies that are bilking people upfront out of $1000-$1800 per listing and are not delivering the goods sooner or later this will catch up with them since the public will get wise to them.
  • Mark C | 15 Nov 2014, 06:20 PM Agree 0
    Hey Bill, trying to persuade those who believe agents charge too much and any 12 year old can sell a home is like making the 'proverbial hole in the water. "A man convinced against his will is the same opinion still" , famous quote by Dale Carnegie.
  • Bill Lafferty | 15 Nov 2014, 10:06 PM Agree 0
    Mark, you are absolutely correct, unfortunately sellers many times have to find out the hard way losing money to these flat fee outfits that merely take their money upfront and then months later the home owner comes to the realization that they are simply a FSBO posted on MLS and are not in any way on the real professional market.

    What I really resent though are these flat fee companies that take sellers money up front and preach real estate fallacy that sellers can learn how to sell without commission and don't need a realtor to represent them.

    I explain to sellers that commission is not the expense most people think it is, it's a marketing tool. It can be like an attractive lure or a repellant that drives agents away.
    The right commission is like an attractive lure that attracts the most agents, the most showings, and the highest and best offers

    Learning how to sell without commission makes as much sense as learning how to fish without using bait. What are your odds?

    This explains why these flat fee companies always insist on being paid upfront, not like the professional Realtors that are only paid after bringing an acceptable offer to their seller and only after the home is sold and closed.

    Being commission wise and price foolish is the equivalent of being penny wise and pound foolish.

    Which is more important saving a few dollars on a real estate commission or selling your home for the absolute highest price and thereby netting the most money possible in your pocket? Which is it?

    Isn't it always the bottom line that really matters?


  • Mark C | 16 Nov 2014, 12:23 PM Agree 0
    To Bill Lafferty - Those who understand the value that real estate agents provide, have no qualms about paying our fees. The others whine and complain because according to 'them', our fees are too high. That is a child's argument. The public has ALWAYS been able to get what they want at a price the public considers fair.

    Otherwise they simply use another product or service provider. It is that simple. Personally I believe that buying a 'Lexus' car is a waste of money. The two most important components, the engine and the transmission, as well as most other parts, are made by and go into all TOYOTA cars. You don't think so? Ask any TOYOTA certified mechanic or Google it.

    Therefore I don't buy Lexus. Great car but in my opinion overpriced. What the 'professional commision whiners' want is to have MLS service for the price of those 'can't-sell-your-home-but-pay-me-up-front' clowns.
  • | 16 Nov 2014, 02:21 PM Agree 0
    To Mark C,
    I love the 'can't-sell-your-home-but-pay-me-up-front clowns'. Very good description and really says it like it is.

    Can you send me an email to william.lafferty@creb.com I have something to share with you that I think you would really benefit from.

    Best regards
    Bill
  • Anonymous | 16 Nov 2014, 02:29 PM Agree 0
    No, I won't bring a buyer.
  • RobertT | 16 Nov 2014, 02:30 PM Agree 0
    Get the lead - then switch them to something better at full commission. That outfit won't be there for long... One lawsuit with a lousy agent is all it takes.
  • lottery dreamers | 16 Nov 2014, 03:57 PM Agree 0
    don't worry when the fees drop/agents become less relevant u can always become motivational bloggers explaining how one day you use to take advantage of sellers/buyers when treb had a monopoly....when the lawyers and treb lose their fight too keep your monopoly anymore.... reality will set-in and DIY were right...anyone with a monopoly can make money,make their own rules...don't get scared about competition...too bad TREB/agents don't say they welcome any form of competition./openness to the information because my skills are beyond the monopoly....genius!!

    Treb wants those new agents for their fees/courses letting them dream of $40,000 with a stroke of a pen. No wonder they don't want them to lose those big commissions because all those agents will be gone, no new agents would sign up...nothing to do with skill but selling a dream..lottery winners



  • old timer | 16 Nov 2014, 04:13 PM Agree 0
    It is with a smile on my face I read the 'for the large commissions' group berate the 'flat fee' guys AND the reduced commission Realtors. I have over 40 years in this business and have helped sell over a billion dollars worth of residential properties. Needless to say, I have made a lot of commission money over the years. Having said that, I still see my self as 'open minded' and with a handle on the pulse of the selling public. The public wants VALUE for their dollar. Being in the 'business' and also paying selling commissions on my own real estate, I have worn both hats. The tide is changing. The public has never been more knowledgeable on the subject of real estate. It doesn't take a scholar to see that commission of $10,000-$50,000 do not equate to the amount of time and effort that a Realtor puts in to sell a home. If we Realtors analyze this subject of excessive commissions honestly and realistically, I am sure we would come to the conclusion that commissions have to be lowered and new means, methods and business plans have to be enacted by the Realtor to make a decent living. The argument that discount realtors don't work as hard, or they aren't as qualified as other Realtors, is a total crock. In evolution, nothing stands still. Our commission rates have stood still for multiple decades. It is time we woke up and smelt the coffee burning. I am sure the majority of Realtors will dig their feet in and try to hold out for high commissions. Good luck. The truth is: changes are a-coming and Realtors who recognize this will benefit financially. I am happy to say I no longer own my own real estate firm and have joined a very progressive discount realty company and interestingly, my income has gone UP not down. It is true, one works harder in discount companies but the rewards are better on an average then your conventional Realtors charging high commissions. By the time the mainstream realty companies wake up and change their commission structure, our company will be a household name such as Re/Max, Royal LePage, etc. I would say: if Sellers want to pay an 'upfront' fee to have their home posted on the MLS, AND if Sellers want to pay full regular commissions, I have no argument with that. On the other hand, discount realty firms should not be the object of scorn, false accusations, and general disdain. In the end, no matter what business plan is used by Realtors, the buying and selling public will decide its success. (sorry I hit the POST button too many times on my last post)
  • Old Timer | 16 Nov 2014, 05:36 PM Agree 0
    Fellow Realtors clinging to the standard of charging high commissions, the plain, simple truth of the matter when it comes to the actual 'earning' of our commissions is this: "20 years ago, there was no Internet, no BlackBerry's or iPhones. REALTORS had to use binders, pick a few listings they thought their clients would like, then drive them around. They earned their commissions. Today the typical client looks at the MLS themselves, drives by to look at the properties, and then calls the REALTOR if they want to go inside. Technology has made the job a lot easier, but the commission rates haven’t come down.” 
 And as for 'earning our money' by being a top negotiator. Truthfully, how many licensed Realtors can be considered 'top negotiators'? If it is true that over 95% of real estate sales comes as a result of our MLS, then that would mean all the 'other' neat things Realtors do, or supposedly do, only result in 5% of the sales. This fact almost makes it redundant the 'other things' Realtors tout that they do besides the MLS listing that they say discount Realtors can't afford to do out of their reduced commission rate.
  • Bill Lafferty | 16 Nov 2014, 06:19 PM Agree 0
    To Old Timer,
    When does a discount agent stop being a discount agent, when do they stop their discounting? When they are negotiating an offer on their seller's home? I certainly don't believe so, do you???
    Any realtor who places such little value on his or her own services to the extent that they cannot effectively negotiate their own commission upfront with a seller, then realistically you have to ask, how effective, how competent, how capable is this agent going to be in negotiating the highest price possible for their seller's home?
    If any realtor is so willing to slash and discount their own income or commission upfront, what do you realistically think they are going to do when they are out there behind their seller's backs negotiating an offer on their seller's most important investment, their home?

    Old timer, If you can't defend your own commission, how are you going to defend and maintain your Seller's asking price?

    Unfortunately, some people including some agents such as yourself focus so much on commission, they lose sight of the most important thing. What is the most important thing? That is selling your client's home for the absolute highest price possible thereby netting them the absolute most money in their pocket.
    Which is more important, how much commission you offer or how much money you net? Isn't it always the bottom line that really matters?

    Commission is not a liability or an expense. It's a marketing tool! It can be like a powerful magnet that attracts the most agents, the most showings and the best and highest offers, or it can be like a repellant that drives agents away.

    Real estate experts say " To get the best service and absolute highest price possible for a home always choose an agent based on a superior marketing strategy and powerful negotiating skills.

    Discount agents do not have powerful negotiating skills and that's why they are discount agents and can't stop discounting all the way from their own commission to their seller's asking price.
  • James Carrick | 16 Nov 2014, 07:02 PM Agree 0
    Commission whiners pay attention. You are not the first nor the last to predict the extinction of real estate agents, their outrageous high commissions and most of all their monopoly. For a pro like myself who has been in the business for over 30 years, it sounds like a boring broken record. I've heard it all before.

    Today, GOOD real estate agents are needed even more so because of the complexities and ramifications of potential lawsuits by sellers, their lawyers, buyers and their lawyers, home inspectors and banks to name a few.

    If you do not like paying real estate commissions, stop WHINING and buy from a private seller who is using one of those "can't-sell-your-home-but-pay-me-up-front" clowns. If that doesn't work for you, you can always rent, live in a van, or travel around the world with a backpack.
  • Tical | 17 Nov 2014, 08:31 AM Agree 0
    I know people who can't even formulate a proper sentence yet they are fully licensed agents. What does that tell you?
  • Bill Lafferty | 17 Nov 2014, 08:45 AM Agree 0
    Tical,
    What that tells you, is the importance of selecting the right agent, not just any agent, because not all agents are the same.
  • Peter B. Ontario | 17 Nov 2014, 08:56 AM Agree 0
    The commission-confusion has only been exasperated by extreme views from both sides. I have seen listings that offer minimal compensation sit and others sell quickly. The difference? Proper pricing. I have seen full cost (listed at 5-6%) listings sell quickly and others sit for months. The difference? Proper pricing. Let’s be blunt: if a 3% listing fee guaranteed better service, all of the smart agents would work for those brokerages and all of the crappy ones would list at 1% to pick up the chaff. Is that an accurate representation of the quality of Agents you have come up against? Some brokerages insist that their gents list at 2.5-3% (plus co-operative) because they need to pay for those large, glossy offices. Rent is not cheap. I list at a total of 3.75% with 2.5% ALWAYS going to the co-operative agent because I want my homes shown and by proper pricing, they sell. I make less but waste less as well. The shift to “seller only services” is mostly the result of greedy Brokerages that would rather sell the “big brokerage means better exposure” bull****. Frankly, we (Canada) need a new association of independent Realtors to represent our interests. CREA is irrelevant and would rather spend millions of TV ads and on legal fees to fight a Competition Board that feels it can mandate a professions pay scale (why don’t they attack Legal fees in Canada, eh? Too many friends).
    You want to maintain the industry? If your Brokerage insists on a full fee listing even if it mean you will loose the business, tell them to stuff it and find a better brokerage. By making our fees flexible, we fight the “seller only services” or at best, let them fall on their faces when the seller gets sued for their (innocent) missrepresentations.
  • Peter Barbati | 17 Nov 2014, 09:06 AM Agree 0
    Actually, most "Flat fee" brokerages have full service plans and up-front ones as well. The Broerage I work for has both. I rarely take an "up front" fee and only when that seller intends to go to a "seller only" service. You (we) need to offer a range of services to compete in today's market. It makes no sense (is plainly stupid business) to lock onto one business model and loose business as a matter of ego. If that were the case in all aspects of business, you wouldn't shop around for homes, business services, televisions or shoes. You seek a better combination of features-price and so do home sellers.
  • Tical | 17 Nov 2014, 10:51 AM Agree 0
    @Bill
    No doubt there but then again the market is saturated with agents so finding the "right agent" can be like finding a needle in a haystack at times. You don't know whether you have a good or bad agent until it is to late and you already signed on that dotted line locking you in with them for the next X months. The requirements to become a licensed agent should be more strict IMO.
  • OVERPAID | 17 Nov 2014, 11:10 AM Agree 0

    It’s good to see RECO try to educate the public on how the real estate law works for them and against them when making one of the biggest transactions in their lives.


    The lesson: don’t rely on a real estate agent to protect your interests. Do your own research and be prepared
    We pay 20,000-50,000 and you can't rely on them!!!!!!! you pay a Lawyer 1,000 and you feel pretty good/safe !!!
  • Ontario Lawyer | 17 Nov 2014, 02:54 PM Agree 0
    This post nailed it, but it raises the question of how realtors show value to their customers. How can a realtor demonstrate value to a client unless the client has been previously disappointed by an alternative model? The reality is they cannot. I think there are great agents who earn their commissions but I think there are a lot of really lazy agents too. Unfortunately, your industry is polluted by agents who take a single photograph and sit back and wait for a buyer's agent to show up with a deal and your regulator is weak. As a lawyer, I see dreadful agreements that should never have been made. I see deals that have been drawn by incompetent agents. I also see excellent and thoughtful work that demonstrates the value that many of you provide to your clients. Simply put, agents don't all show the same value, but the client community is presented with a fixed commission rate (some would argue price fixing, but I will leave that to another day). Commission is often represent significant multiples of the other professional fees paid on a deal. Its fine for you to tell yourselves that its all good, but its not, and the industry would be very well served to stop talking to each other and start talking to the unhappy client base.
  • Mike C | 17 Nov 2014, 04:11 PM Agree 0
    Dear Ontario Lawyer. I'm not alone when I say I've had great professionals dealing in all sorts of fields. From my car mechanic to my family doctor, my own lawyer. I've also received so-so service and atrocious service from professionals in every field.

    It is not OUR responsibility to make sure the public makes the best agent selection. We can only attempt to educate them so that we all come to a happy ending. Many buyers and sellers prefer to deal with an inexperienced relative or agent friend simply because they feel more comfortable.

    No amount of due diligence on our part or government regulations can help those consumers who do not do their homework and use bad judgment.
  • change is coming | 17 Nov 2014, 04:26 PM Agree 0
    Lot of comments mention newcomers come and go...naturally when you have big money,power it is hard to stay alive in any field that has a monopoly
  • A. Madsen | 17 Nov 2014, 07:28 PM Agree 0
    Change is coming. From where? From you?
  • J. Morrow | 17 Nov 2014, 07:40 PM Agree 0
    Down with the real estate monopoly! Heard that 25 years ago. Change is coming and will continue to come. Whether you like it or not, there will always be a place for real estate agents, until the buying and selling public says 'no more'. So far so good.

    We agents will never be able to please the whiners and malcontents.
  • Bill Lafferty | 17 Nov 2014, 08:59 PM Agree 0
    To J. Morrow:

    Change is coming alright. That is the public are starting to get wise to these "Can't sell your house but pay me up front clowns" and "Discount Agents" that can't negotiate their way out of a wet paper bag leave alone be competent enough to negotiate the highest offer on a seller's home.
    Real estate experts say, " To get the best service and highest price possible for a home, always choose an agent based on marketing strategy and powerful negotiating skills"
  • Bill Lafferty | 17 Nov 2014, 10:05 PM Agree 0
    To Tical:

    Whenever I see potential listing clients, I have several letters of recommendation from past sellers. I even had a potential listing client call the sellers of my most recent sale. The thing to never forget is that you are entrusting the sale of your most important investment with the agent you choose. Why gamble with your most important investment?

    If you were involved in a major lawsuit to the tune of hundreds of thousands of dollars, would you hire a really good lawyer with an excellent track record but at the same time he's not cheap with his fees or would you go with just some cut-rate lawyer because his fees were cheap, or would you go to court and represent yourself since you wouldn't have to pay a lawyer any legal fees?

    I just received a letter of appreciation from a seller that was with Comfree for 40 days on the market. While representing himself on Comfree he only received one offer from a buyer's agent which was $35,000 less than the offer I managed to bring him in 4 days after he terminated his listing with Comfree and then called me to come and list his home.

    Was I worth the commission I charged? Absolutely!!! Because I put substantially more money in the sellers pocket even after he paid an above average commission.
    Which brings us to the thought provoking question, which is more important how much commission you offer or how much money you net?
  • Tical | 18 Nov 2014, 10:38 AM Agree 0
    @Bill
    I totally agree with everything you said but aside from you and a select few I have not seen/heard of agents with a great portfolio that they are willing to share with clients, most likely because they don't have one to share. I am not the type to go with some "cut-rate" service whether it is a lawyer or an agent. I have used services from some of the biggest names on the market but still felt disappointed even with the extra costs they charge for their "great service". I believe that professionals in the field are the best people to have on your side to get the end results you desire. My major issue is the fact that the market is over saturated with agents who I believe are not properly qualified, educated or just lazy which ruin it for the rest. It just seems like anyone can go and get certified these days. Time for more strict guidelines on who we call professionals and allow to get the certification? Maybe continuing assessments to get rid of the bad ones?
  • Genius | 18 Nov 2014, 10:49 AM Agree 0
    lot of those comfree/lower rates services lisitngs are ignored by agents so no wonder they don't sell.. more genius..
    any clown can sell a detached/semi house with supply and demand ( economics 101)

    they are fighting for their monopoly because once the commission drops less agents signing up and more dropping out..the fees to treb will start drying up..

    Lawyers should be payed more since most of them are qualified..not some boasting agents who think they invented the wheel in 101 economics..they use tactics that drive up the price...they do that in monopolies...tell me one other industry that plays with pricing
  • Bill Lafferty | 19 Nov 2014, 12:26 AM Agree 0
    Hey Genius,
    On account of your baseless silly comments and the fact you don't know how to spell, it's time you give yourself another name. Simply calling yourself Genius as in your case sure doesn't make you one.
  • Geniuses | 19 Nov 2014, 10:48 AM Agree 0
    I was calling you genius and I am far from It, but agents sure talk like they invented the wheel...ur attacking grammar skills now..u are sure reaching and desperate there Laugherty



  • Bill Lafferty | 19 Nov 2014, 08:29 PM Agree 0
    You got it all wrong Genius. Desperate agents slash their own income to try to compete with professional Realtors because that's all they have to work with. Are you one of those "Can't sell your house but pay me up front Clowns" or a desperate "Discount Agent"??? or just some dumb lawyer trying to put professional Realtors down so you can get some real estate business??

    Please truthfully answer one of the following categories. This will give some further insight in to your profound comments(LOL)
  • Wall is coming down | 19 Nov 2014, 09:44 PM Agree 0
    You have to be desperate fool when you start name calling or using derogatory terms to other professions...and u call urself professional

    Just another over the top agent who thinks he invented the wheel in a real estate market that sells itself.. just remember laugherty ur a salesman not curing cancer.... please stop embarrassing urself with ur defence and justifying being overpaid..sounding like that fool from NEWYORK trump
  • Bill Lafferty | 20 Nov 2014, 01:05 AM Agree 0
    I'm afraid the Wall is coming down for you Genius and those like you that have no skills in selling real estate other than offering cheap commissions . I've been in the business since 1984 never had to be a discounter like yourself yet to survive all these years in all types of markets in the Real estate business. That's because unlike yourself I'm good at what I do and I earn my commission because I'm able to put more money in my seller's pocket through marketing strategy as well as negotiating skills.
    Real estate experts say "To get the best service and absolute highest price for your home always choose an agent based on marketing strategy and negotiating skills. They also say never choose an agent based on price alone or commission alone."
    Only a true fool thinks he knows better than the experts and argues against years of experience.
  • BUbbles | 20 Nov 2014, 09:01 AM Agree 0
    That is how well you read people I am not a agent , low cost service or anything ..... some study or comments by ur own industry states something and voila GOSPEL,... ur good at a monopoly in a supply and demand industry,low rate environment....teenagers could do it,....tactics to scare buyers,pressure they better pay more it won't last,buyers who see the appreciation ,.....creates a inflated market that could have consequences and agents will say" oh well."..they come up with a term.".Bubble",..".not my fault I am a expert"

    What did u tell ur clients in 1989-1990...oops,thx for the commission, better luck next time
    The days of over inflated commissions, posturing around like u invented the wheel is slowly going to change..

    I will predict a bubble on COMMISSIONS!!!
  • Bill Lafferty | 20 Nov 2014, 11:26 AM Agree 0
    Bubbles,
    In 1989 and 1990 I sold all kinds of homes, in fact I have sold homes in all different kinds of markets, otherwise I wouldn't have survived in the Real estate business all these years. In fact in slower markets sellers need more than ever Realtors that have a superior marketing strategy and powerful negotiating skills. The last thing sellers need in a tough market are "Can't sell your home but pay me up front clowns" or discount agents who can't stop discounting all the way from their own commission to their seller's asking price.

    You say "teenagers could do it"?? Talk is cheap! I challenge you to go get your real estate licence and find out how easy real estate is, then maybe you'll know what you are talking about. Perhaps you'll learn that Realtors are not to blame for escalating prices in the housing market, it has nothing to do with them since it's the buyer's demand for housing that causes prices to rise.
    Realtors have a fiduciary duty to the sellers they represent to work in their sellers best interests and sell their home for the highest price possible.
    if you were selling your home wouldn't you want the Realtor representing you to negotiate and sell your home for the absolute highest price he possibly could get buyers to pay???
    Answer honestly, Yes or no?????
  • Boycott | 20 Nov 2014, 12:16 PM Agree 0
    Stop trying to be a poet with all the fluff and justify 20,000-50,000 for the services...surgeons don't even make that kind of money and you even compared them in ur postings...ur a salesman that connects sellers and buyers ..not rocket science...u check previous sales and shoot for that in negotiations...how genius is that.. play on emotion more genius,supply is low more genius...

    bottom line you have a monopoly that they are fighting to keep at all costs....consumers are talking,changes are going on, information is easier to get....u are grasping at straws...have a back-up laugherty...you are not that special ...just a monopoly that they are fighting to keep..

    If I had access to previous sales wow I would know what to shoot for, forms you can fill out urself these days and post a listing...now if someone said a I am strong negotiator for $1000-2000.. I would hire them to keep the emotion out a little.....ur industry boycotts listings that are handle by owners and that is just greed...pay me 2-3% or else I up not showing my buyers...industry thinks the commission is paid by sellers when the buyer is paying for it by paying more for the property...
  • Do it well & you'll be fine | 08 Dec 2014, 09:55 AM Agree 0
    I've taken the time to read as many of these comments as possible, but half way through there's a definite trend. Simply put, there's the agents and then the general public. Agents can always justify commissions, as they should. The general public, however, either has a decent grasp on what agents actually do or they believe all the negative naysayers out there. People, it's very simple, other models that have arisen to "help" people sell their homes haven't worked well. Realtors, therefore, continue to provide a valuable service. FSBO companies, DIY'ers, Redpin, etc are just trying to cash in on the negative opinion some people have on the real estate industry. Unfortunately, there's a lot of realtors who shouldn't be in the industry, but there's some great ones too. If TREB is ordered to make certain info public it won't change a thing. The U.S has been sharing sold prices, market info, etc quite readily for some time now, but yet people continue to use agents. Why? Because it works. Because people can save more money than they could if they did it on their own. Because the commissions paid often end up costing nothing when compared to the savings. If you have an issue with working with agents then you should simply not use one. To be honest, an agent shouldn't be working with you because you'd probably be a client from hell. I am an entrepreneur day in and day out and I have a lot of respect for realtors who do their job well. It's not an easy business, regardless of what some people say. Having owned multiple companies, I only wish agents in this industry success and encourage you to ignore articles like this that have no real basis. Do your job well and it won't matter what TREB does or what other "new" approaches arise.
  • | 17 Dec 2014, 01:02 PM Agree 0
    It's easy for any armchair critic to criticise what others do for a living. I maintain that if looks as easy as "getting your money for nothing", then what are you waiting for...?
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