Are full-service realtors a dying breed?

I think that consumers should have a choice when it comes to listing their property on MLS only and not taking the 'full package'. Many will still take the full package, but many will not. Last week I heard of a listing that sold in a day in my town and the realtor made $14,000. That is ridiculous, and what happens is the house price is increased to cover the whopping 6% or 7% fees and so pushes prices up. I am all for fair deals for house listers.

I'm with Mr. Aaron. Do realtors "earn" their keep. In short...No!! (and I have 2 friends who are realtors.) Would changes encourage me to sell?? No. I would or wouldn't sell depending on my family circumstances. However, I DO think it's time to get some honest competition, one way or another in this country (Canada). (The states has far more REAL competition than us. That drives prices down in a very healthy way.)

I think it is time that Canada's MLS became open to other's besides licensed realtors and I applaud the move by Aitkin to make it happen. I have been trying to sell my property in Alberta for the last two years and because it is a "higher" end property I wanted to avoid the fee's normally charged by a realtor. On my property, the 7 and 3 percent standard would result in a profit to the realtor of almost $60,000.00 which, in my mind is an obscene fee for the work that a realtor does. The first year I listed with Comfree for a total cost of about $900.00 and although the property did not sell I was very close to closing on a deal. The second year I listed with a realtor for two reasons:1) in order to be able to list on the CREA's site, and 2) to have a realtor pre-qualify buyers. I negotiated a commision of "only" $35,000.00. and once again came very close to closing a deal. I accepted an offer only to find that the buyer didn't have a hope in hell of qualifying. This year I am going back to Comfree because as my experience showed, listing with a realtor had absolutely no benefits over Comfree. If I could also list my property myself on CREA's site, perhaps it would prove to be the best solution to my situation. In response to your question "Do realtors earn their keep?" - absolutely NOT!

Great news for consumers! Bad news for high school dropouts looking for instant, unwarranted and unearned credibility as a "Realtor". The so-called realtor is obsolete. How hard is it to place an ad on Kijiji? Not that hard. If individuals are allowed to place their own ads on MLS, the need for realtors is diminished considerably. Sure, there's always going to be someone who just couldn't be bothered to save the 10,000 or 20,000 or more dollars that would be wasted on a realtor placing the ad on MLS for you. These are the same people who probably couldn't organize selling their own car privately either. For the rest of us this is great news and keeps tens of thousands of dollars exactly where it belongs....in our pockets. Its about time.

I agree with all those previous comments. The Realtor does not work very hard for their unruly high commission fees of between 5 and 7 per cent. It is about time that access to the CREA site became easier for a prospective sellars. I am sure the little bend in the rules by the CREA is nothing but "lip service" but it is a start. Now lower the commission fees to 1.5 and 2 per cent and then have the agent work for it will be the next big step.

Before you go taking down a whole industry maybe you should look at how many people across the country that industry employs... from not just an agent stand point the administrative staff the brokers employee, each board has employees etc... Not to mention advertising dollars spent in this industry that keeps how many employeed each year in other industries?? and if you think the agent keeps all the commission you pay them your dead wrong.. its not like that whole amount goes into tha agents pocket.. There are fees associated with being a realtor ..They are running an independant businessess under a name...There are a number of discount brokers out there and commissions can be negotiated. If anyone can post stuff on MLS who becomes responsible for making sure the information is correct.. I am sure john doe doesnt have insurance that is going to cover him if he decides to lie .. which lets be honest many people do and will lie. I have had the pleasure of working with an amazing realtor..She knew her stuff and just wasnt there to earn a quick buck.. Realtors should bring value added to the table ... They should make it harder for people to become agents....Agents however do have to spend time working with clients that they may never see a pay cheque for.

There is nothing quite like labeling all realtors under one black banner! Having been involved in sales for many years but not in real estate, I certainly resent people's attitude, here, towards sales people whether they are in real estate or otherwise. Just like in any business, there are good workers and bad workers but one cannot tar and feather everyone with the same brush due to a couple of bad experiences which some may have had. In fact, it reeks of discrimination. Real Estate sales reps vary in "quality". There are those who are dedicated to helping sell your property and those who are just in it for the money... just like teachers, doctors, lawyers, etc.... They can all fall into such categorization. Just because you don't see them "working" doesn't mean that they are sitting there waiting to collect on an "easy" sell. If a house sells in a day, then it means either it was priced too low or that possibly the area is in a "premium" area where people are just waiting to be able to live. In a lot of regions, other than main city cores, it isn't always the case. It takes a lot of advertising in papers, which is extremely expensive, the cost of taking decent photos which will put the "sell" into your place versus the "garbage" some people give you as photos of their homes, the cost and time of putting your home on-line, matching customers to the home you are selling, etc... plus lots and lots of time and cost chasing up on potential home buyers. Most houses in other areas can take up to three months even to five years, like my own parents 6300 sq ft waterfront estate home in a premium area which was well priced but far too big for most prospective buyers. I would have hate to think of what it cost the agent over the course of that time to advertise. Sales all depend upon a variety of factors with which the real estate agent is in tune and which the average person hasn't got any idea about for the most part.
As a marketing and advertising consultant, I KNOW what goes into "selling" anything. Most people haven't got a clue what is all about or the work involved and I certainly resent some of the bad mouthing that people have done here.
I have a brother who is a real estate agent and a very dedicated one. When he sees a property that is in a state of disrepair or which needs "help" , he takes the time to get involved in order to ensure a successful sale within a decent period. He has even gotten his own family to help clean up people's backyards, etc... and has even helped some clients move, especially elderly one because their own families wouldn't offer. So quit tarring everyone with the same brush. There are some great real estate agents out there who do an honest days work!

I agree that realtors do offer valuable services such as negotiation expertise, quasi-legal advice, deal structuring, etc. These are the kinds of things that make the home selling experience much less stressful and mitigate the chances of a bad deal. My problem with the real estate industry lies in the compensation they feel they are owed for such services. For a couple of days/weeks of work, does it really seem appropriate to charge 5 or 6% the value of a home that ppl spend 25-30 years paying for?!?! I think not! Furthermore, does it seem appropriate that a realtor gets paid more when a house is worth more? What extra service are they providing for a more expensive home? I don't think it is harder to sell one over the other... not in that proportion!

I would like to see a fixed fee for the sale of a home. There may be certain categories and price points, but to charge me based on how wealthy I am is somewhat ridiculous!

I certainly agree that, on certain deals, commission fees could be lower...and often are, as negotiated by the individual agent, however, I believe that the general public is not completely informed on the subject of realtors. First and foremost, I don't think people realize what it costs to be a realtor. For an agent who works for a "brand" brokerage (i.e. RE/MAX, Coldwell-Banker, Royal Lepage, etc.) there are considerable fees payable to that brokerage in the way of a "desk fee" or "home plan", in addition to a percentage of their commissions that are payable to the parent company who also charge them an annual fee. They also (usually) need to be members of a local regional real estate board, who also charge fees including, but not limited to, monthly dues, CREA dues, OREA dues, Teranet Access Fees, Realtors Care Fund, etc. Insurance premiums must be paid to the Real Estate Council and to keep their licenses current, members must continuously attend seminars and conferences at a further cost to them. Advertising listings in local papers and other publications is another expense. On average, at the brokerage that I'm familiar with, realtors have to earn at least $20,000. in net commissions before they would earn a dime of profit. In a small town market, that amounts to a lot of sales. And although the standard commission here is 5%, most deals involve two agents (the listing agent and the selling agent) so the commission is split between them.
Yes, sometimes a property will sell very quickly and the payout seems high, but more often a listing could take months to sell and may not sell at all...yet expenses still must be paid by the realtor. As one realtor has said to me,"Commissions paid out are in direct relation to the fees that we must pay. Perhaps if we weren't being charged so much just to be in this profession, we could afford to charge less to sell peoples' homes. Some days it feels like I'm working soley to pay my fees, never mind my household bills." I don't think it's fair to refer to realtors as "high school dropouts" as they do pay to go to school to become licensed and continue being educated throughout their careers. Many people have the notion that agents can work their own hours and really don't do much. I know first hand that this thinking is faulty. Most agents end up being on call 24/7...not that they work 24/7...but they work when there's work to be done. It is definitely NOT a 9:00am - 5:00pm job. I'm not saying that changes should not be made, I just feet that many of the comments posted seemed a bit harsh and that people really should be more informed before passing judgement.

I believe Ms. Aitkin's stand is long overdue as the open competitive market should have been the case at the outset. MLS is an exclusive club and certainly having realtors involved most of the time does not add an ounce of value.

Here an interesting experience, Five years ago, a purchaser saw a property having signage of Ashlar Realty in Toronto on site. The buyer was interested and called the agent. It turned out that the agent is listing the property for the City of Toronto on MLS and their listing said two lots 60 foot frontage by 165 foot deep. Ashlar was to receive offers and to forward them to the City of Toronto. Ashlar forwarded to the purchaser an offer form that they City would accept which had the dimensions of the lots in metric as 16.1 m frontage by 50 m deep as opposed to imperial. The offer was signed and submitted with non refundable deposit to Ashlar which was then forwarded to the City. The City accepted the signed offer. The buyer realized, following notice from the City that its offer/bid has been accepted and closing would take place 45 days thereafter, that the property was actually 52 feet frontage and not the 60 foot frontage that was listed on MLS and that the City drafted offer had the correct dimensions in metric which is contrary to the listing. The purchaser advised the City and their agent Ashlar through the real estate lawyer of the mistake but the City and Ashlar would not take responsibility for their mistake and forced the buyer to either close on the deal as is and to sign a waiver preventing him from any other remedies that might have had against the City and the agent or forfeit its deposit. This is a good example of how real estate agents grossly failed in doing their job and instead looked the other way as the problem arose as they were interested in their own benefit and would be accept responsibility.
I could list few experiences that certainly would support openning up the field for proper competition based on reputation, proper services and fair market driven compensation.

I have a friend who is realtor. He works very hard and late hours, does everything to make sure it is a successful sale or purchase, even to go out of his way to help people in many ways. However, even he admits that some properties are easy sells and others are nightmares and the same applies to clients!
This brings me to the relevant question(s) here... the changes are wellcome as every client and property is a different case and the work to sell should be priced accordingly. The commission an agent earns will be split with the brokerage company he/she works for and the other agent who brought the buyer (most times about half,if the case). A good agent will work with you from setting up your property right to get you moving on with your life's next step. Most don't! Sometimes inexperience other greed.
Greed that's it! Money is the Big motivator for all the work a realtor does (or suppose to do). But it is not that your case when you go to work?! Look closer at the salaries for the charity foundations' executives and you'll find out where 30% of your donations go. The issue is a matter of degree.
By degree I mean exactly what you will get in return for the commission/price you are paying when you sell your home.
Here's my two cents on how to get your buck back from a realtor...
Educate yourself a bit and find out exactly how much your place is worth, how easy is to sell and other factors that can hinder or speed up your transaction, or increase or reduce the price. Get a few agents (3 to 6 from freinds who had a good experience) to come in and present their marketing plan for your property and get 3 references from each. Follow through on each and make notes. Choose one close by to show your home often enough, has good references on his/her work and negotiating skills, prices your house right according to your research and does not put undue pressure on you. Never make a decision on the spot! (while warm headed).
Now the fee... Negotiate a step up fee. A lower percentage base if: 1. it sells for asking price and/or 2. if you're buying your next place with them also (this can be up to 2% off). Then raise up to average commision levels if it sells for 10%, 20% above asking (make sure you're not underpriced! research!) Lastly, make sure the realtor is flexible enough in case you're in a tough situation he/she will reduce fees as far a possible (they have a minimum they must pay to the brokerage firm and other costs to cover also) to avoid/curve your losses.
In spite of ways to get your money's worth, the truth is that I believe that a more open system and a better fiscalization of realtors (including the big 4 or 5 brokerages and the "grey" builders elite)activities will allow for a market size expansion and reduction in prices and fees.
Therefore, these are welcome news but far from enough. The biggest mistake Canada (and North America) does is to assume the access to information is equal amongst all. This leads to abuse by those who do have better access to information (we cannot be exerts at everything). That's why we need good minimal regulations and enforcement to balance this assimetry of information and ensure more equality amongst us. North America is on top of inequality above the best countries to live in (eg. Switzerland which is at the bottom). This is just one more area that contributes to it amongst the many. I aks then are we free to chose if we do not have access to the information?!

What about the guy who has a multimillion dollar home, say in Alberta. It takes more or less the same amount of work to sell a 1 million dollar home as it does for a 5 million dollar home yet the fee goes up from about $35,000 for the former to over $150,000 for the latter. It would be more fair to charge a fee for registering with MLS, a fee for advertising, and a fee for the realtor's time. It's time to stop forcing the consumer to pay percentage based fees and allow for some fixed cost options, or, in the case of an individual who wants to do his own work, an option to pay a small fee to use the MLS system.

The one miss conception people have is that all of this commission goes straight into the realtor’s pocket. This is far from the truth; there are brokerage fees, advertising fees, legal fees and real estate board fees. And this is before the personal advertising fees, marketing fees, assistant fees, computer tech fees and so on. Many realtors will spend anywhere from $2500 a month up to $20,000 a month on these expenses. So before you go and say that a house sold for $500,000 gets a $19000 commission, which is split between the two realtors that sold it, remember the additional fees it costs to be a realtor.
Just as a retail store has a 100% + mark up for clothing and other inventory, all of this does not go into the owner’s pocket. There are many expenses that go into opening a store and keeping it open. If you are good at your job or you have a product that people want, does this mean you should be paid as much as someone who isn't as good? Are all people in Real Estate honourable and trust worthy? No. But after you meet one who is good at their job and is trustworthy you will see what a Real Estate Agent can do a lot more to selling your property and getting you the money for it.

I am a Realtor and I think it is absolutely hilarious some of the comments that are being made here. First of all, how would any of you critics who posted here like it if I came into your job / profession and said you are making way too much for what you do? Chances are most people feel that they should be earning MORE than their boss is paying them. So where do you get off telling a whole industry that they do not work hard for their money.

The reality is that a large number of so-called agents never even close a deal on a yearly basis. They are part-time card carrying members who dreamt of making a mint only to realize that it actually does take work, time, skill, money and patience to obtain listings, and work with buyers. The small percentage of Realtors at the top the game earn incomes that the remaining hard working, dedicated, professional full time Realtors who rely on their efforts to provide for their family can only aspire to. It's the 80/20 rule.

As for giving access to the MLS service I think it is wrong. As Realtors we had to invest time and money to earn our licences and then pay on an annual basis in the form of insurance, dues and fees to have access to and keep the system running.

For example, if you asked your doctor to have access to all his files and books in an effort to diagnose your problem on your own. Or, maybe tell your lawyer that you don't want to pay his full cost but that you want access to his admin staff and you will take care of your own claim. Perhaps your accountant will open his office for you and you can use his infrastructure to do your own taxes and only pay him a 1/3 of his regular cost. Heck why stop there, Next time you go to the car dealership ask the mechanic to get everything ready for you and you will do your own oil change.

Wake up people, if you want to sell your house on your own or through a discount brokerage that option has always been there. If you want to use the MLS system and the services of a Realtor than be prepared to pay for those services. The truth is there is alot that goes in to selling a home than just posting it on MLS.

Well.....I see it both ways! One way is how easy and how long did it take? Then how much money and cost out of pocket did it cost to sell the property...? Sometimes....very few times does a property sell fast with little cost! Most of the time you spend hours a day working on files, booking showings, consulting the client to pick up their bra and condoms, help stage the home so it looks nice, etc. Time is worth money! many files have only paid me min. wage at the end of the day and yes, some files have paid me well. An average wage that is like most professions. There is an art to selling and at the same time NOT being pushy or slimmy. These changes may help weed out the slim balls from the ethical REALTOR's. There is no set commission and you can always ask for a better deal...I always write in the contract the fee that we neg. and break it down so everyone understands where the money goes...full disclosure! From $10,000.00 what seems like a simple deal usally only allows me to take home approx. $2,000.00 in my pocket. No really, only about 20%! After brokerage fees, insurance, advertising the property (not just online), fuel, stationay supplies, extra clothing (because preople expect to see you in a suit), reliable car (taking the bus doesn't cut it), oh yes, the last time the property did sell, most important paying your GST and incometax...=20% in my pocket. How many hours did the file take to close during and after the sale with follow ups with lawers, banks, other realtors, inspectors, the city for permits or lack of,....I could go on and on. Don't forget that we also don't get paid if the property didn't sell or the seller didn't give us a little more time in a slow market...Who pays us for our time and out of pocket then...the best recourse is to just walk away and not hang your self because you have to go home and tell your wife we can't pay the mortgage this month but hey maybe next month your can sell a couple!!!! Commercial properties are even worse! Who wants to buy someone elses headache or buy a job? And even worse how do you sell something that is not making money? The building (if that is included) has the best future use and value. Some one else will make it there own and have big dreams. Good for them. But like every one out there wants everything for nothing and now there is a problem...The seller want me to cut my commission because (I told them so..) the offered price is way lower than the asking price...here we go again. Then walk away and say good luck to you, use your our self selling product and don't call me again after you ran your business into the dirt expecting me to work for free!

Shop around, no one forces anything and if they tried....well there's the door! Try someone else.

I gave up using MLS years ago when they decided to put what was once supposedly confidential information up on the Internet.

as a Realtor for over 20 years, we were once gatekeepers of this information. once they open that up to the public, the next natural step is to allow the public to use the system.

how can MLS compete now that they have basically given up the goose? They have shot themselves in the foot. All they are now is basically a web site and we know that there are many web sites out there that the public can use.

by giving up these restrictions that were once on this information, I don't see the value in it anymore.

in fact some of my clients specify not to show them properties that are on MLS because they already know about them. Furthermore some clients that are selling, specifically ask that their properties are not placed on such a public service.

one caveat however I'm selling commercial real estate. As of today, MLS is still the place to be for the housing market.

I recently tried to market a residential family property the same way I market my commercial properties. I got some action, but then decided to co- list it with a friend on MLS and it sold in a matter of days.

so for now I would say that MLS still has a hold on the residential market.

I believe they've completely lost the commercial market, and residential will follow suit.

Jeanette,

With all due respect, I have worked as an admin assistant in a real estate office. Most of the employees don't earn their "paycheque" and I use that term loosely. A paycheque is something you EARN. I have seen many a realtor during the boom get 6 offers on a property the day it was listed. Was it because of anything they did? Hell no. Earning $30,000 + on a property for less than a days work is not fair. I have also seen properties sell when the realtor didn't do anything open houses, advertising or anything.

So what am I getting from your post? That because the real estate sector employs lots of people (many uneducated that probably didn't even finish high school) people should be FORCED to pay insane commissions for no work? Maybe it's time the uneducated bums should get off their asses and get an education and a REAL job.

PS
I was an admin assistant right out of high school, and worked as one all through college.

When a specialized industry aspires to greatness, there are always a few folk out there to knock it - thinking "the world owes them". I suppose these folks are already wondering if Olympic athletes should pay taxes on the value of the precious medals they may win after years of hard work and training.

A Calgary Realtor - Aspires to greatness? Are you kidding? If you are so wonderful, opening up the market to competition shouldn't worry you at all! You are comparing yourself to an Olympic Athlete... someone who has trained every day of their lives since childhood. Next you will be comparing yourself to a doctor. Or a teacher.

Opening up the market to competition is the best thing for Canada. At the very least, it will take the heads out of the asses of some of the current "realtors" here.