Are full-service realtors a dying breed?
Competition Bureau Commissioner Melanie Aitken has cut the heart out of the Canadian Real Estate Association's restrictions on the use of the Multiple Listings Service, the database at the centre of Canada's housing market.
Is this the beginning of the end for CREA's 98,000 members? Will they soon be replaced by U.S.-style budget brokers, in the same way that upstart online brokers muscled their way into the financial industry a decade ago?
I doubt it. But it's a nice idea nonetheless.
When the U.S. market went through a similar exercise, the result was a slew of sites that offered enhanced listings at sharply reduced pricing.
Despite a troubled U.S. housing market, do-it-yourself sites like Redfin and Zillow report strong sales and increases in web traffic. An average of 9 million users visited Zillow last month, for instance, an increase of 19 per cent year-over-year.
As technology and deregulation lower the barriers to entry here in Canada, upstarts like Property Guys, Homebuyandsell and even general purpose sites like Kijiji are hoping to capture a bigger piece of the listings pie.
And while new competitors don't necessarily want to cut real estate agents out of the process completely, the agent's role and the accompanying costs may have to change.
With a discounter who'll list your house for a small fee instead of a large commission, more people will certainly consider selling their houses on their own.
Realizing this, CREA has already said it would make changes to allow consumers to access cheaper services. The changes, which members will vote on next month, would make it a bit easier for sellers to post their homes on CREA’s site without necessarily signing on for an agent’s full package of services.
The proposal fall far short of both the U.S. experience and the Competition Bureau's recommendations, however.
What do you think: Do realtors earn their keep? Would changes like this encourage you to sell your own home?
By Gordon Powers, MSN Money
Posted by: Justin M. | Feb 17, 2022 12:38:21 PM
I think that this is a bad part of our culture. We think we are entitled to anything we want. We think we should tell people what they are allowed to earn, and HOW DARE THEY earn more than me.
First of all, the MLS is a private website. If Joe Blow would like to start a website, and name in MLSforyou.com, please feel free. No one is stopping you from advertising on the web. Put your house on Kijiji, put it on Craigslist, put it in your local paper, distribute flyers in your office. NO ONE IS STOPPING YOU. But the MLS is a private site, that realtors pay thousands of dollars per year to be a part of.
Second of all, the MLS isn't this magical site that sells your house. You don't just put it on there, and Boom, house sold. It takes a lot of work. Showings, open houses, advertising, marketing, negotiating, and closing the deals. I work in the commercial industry in Sales. Sometimes my deals take 6 months to close through negotiations, and planning. So if I get paid $5,000 for a deal that takes 6 months, and $5000 for a deal that is 3 weeks, who cares? It's none of your business. Sometimes some deals are easy, sometimes deals are hard.
I provided a service to my clients, they benefit from that service, and they agree to pay me for my time and efforts.
To all the people that say..."HOW DARE YOU GET PAID WHAT WE AGREED WHEN IT ONLY TOOK YOU 3 DAYS TO SELL?!" Are you saying that you are mad at your Realtor for selling your property in 3 days? Would you rather have them get paid the same but 9 months from now? What a strange arguement....
So essentially... just butt out. Quit worrying about what Realtors make. They provide a valuable service. If you want to market your home on your own, please do so.
Posted by: neil simmons | Feb 17, 2022 12:45:50 PM
Generally realtors are a bunch of rogues,try to find one that doesnt own multiple properties,or sell repos to his builder buddies,They are a cancer on our society,and the sooner they are gone the better,then us ordinary folk may be able to buy a fixer upper.They sit on properties they want for themselves,or their buddies,fudging things very skillfully to their advantage.How many people out there have put an offer on a bargain that has been for sale forever,suddenly to find another 'offer" appear.Ive lost properties twice to greedy realtors,so I speak from experience.One realtor tries to defend his "trade' saying it is 80/20 in the realtor game.This is so because the big boys and girls in realty keep the small ones out!If you can find an established long time realtor that doesnt own multiple properties,and have his greedy little fingers in all sorts of pies,good luck to you!youll need it.The sooner they are brought down to earth the better,I dont think it will be any time soon,alas.
Posted by: Shawn | Feb 17, 2022 12:51:04 PM
If I am not mistaken, Realtors started up the MLS system. Anytime someone is from the outside looking in and they see success in something they want a piece of it for nothing. They want to reap the benfits of someone else's success. Realtors also pay fees every month to keep the MLS system running, why should anyone else be able to use it when they don't pay the fees? It's just like all of us saying that we now want a piece of Microsoft, google, or facebook because they are so successful and we want in on it for nothing (maybe not to that extreme, but you see my point). For those people that want to advertise for free, then go do it on sites like Kijiji or even go make your own site. Or better yet, pay some money, make your own site and then see how you like it when everyone else wants to all of a sudden use it free of charge if it were to become successful.
As for the part of Realtors earning their keep.
80% of Realtors don't make it in this business and have second jobs because of the enormous fees. Sure there are some that succeed as with any other people that succeed in life (All becasue the worked for it). Think about the ones that maybe sell 1 house a month but have to pay $1500-$2000 a month in fees. Plus when you pay a Realtor your fees, their office keeps a portion and then they still have to pay half to the listing or selling Realtor. Therefore in the end it doesn't add up to a living at all. That is why you will see lots of Realtors driving cabs in the evening. Some people should take a look at the whole picture and put themselves in that persons shoes before they speak. Sure there are two sides to every story, but take a minute and try to see the other side just for a second. If you see the other side as nothing but riches, then by all means why don't you do that job yourself? Wouldn't everyone in the world be doing that job? Give it a try and let me know how that works out for ya......
Posted by: TD | Feb 17, 2022 12:52:09 PM
Let me preface this with "I sell and buy real estate" as an end-user (builder). I buy A LOT of Real Estate, and I sell A LOT of finished homes... I got so fed-up with paying Realtor fees that I decided to train as a Realtor so that I could have access to the MLS system. News flash guys - those of you who are panning Realtors as stupid high-school drop outs have got it totally and utterly WRONG! Even though I'm only trying to licence so that I can save on the fees by accessing MLS, NOT to be able to sell for other people, I have to say to you that Realtors have to learn and deal with a lot more than I ever gave them credit for!!!! Yes, I too would like to see access to MLS opened to regular folk, and I do believe that realty fees in Canada are absurd - look to Europe for comparison - in the UK a homeowner on average pays only 1.5 - 3%!!! However, and this is the BIG however, the laws surrounding the legal transferrance of a fee simple interest or a strata interest in a home are complex and time-consuming to learn... So, before you throw your home on "Used or Craigs" you might want to consider whether potentially saving that few thousand is worth perhaps losing everything?!?!?! Just a thought for those of you who mistakenly think its as simple as unloading your old banger!!!!
Posted by: Deuce | Feb 17, 2022 12:58:58 PM
To suggest that realtors provide anymore assurance that the house you are buying is as represented, you are kidding yourself. I purchased a number of houses, and if it were not for an excellent home inspector, the claims made by the selling agent would have been accepted as truth, and I, would have bought a house that had considerable foundation issues. In fact, both the selling agent and my agent went on and on about how great the house I considering buying was. It had no problems (great bones, as they say). In fact, it wasn't. And, I found out a later date, that the selling agent was aware of these foundation issues. Without MLS, most realtors are no different than a sales associate. I am so, so glad that the realtor hay days are numbered.
Posted by: NW Calgary | Feb 17, 2022 12:59:19 PM
I think a lot of people are missing the point here. Canadians don't want access to MLS for free, they want it for a set fee... instead of paying a realtor a huge amount of money. MLS is a great tool that people should have access to without paying a PERSON to do whatever it is they do.
I would pay $1,000 for the use of MLS, but not $30,000 for the use of a realtor.
Posted by: John | Feb 17, 2022 1:35:24 PM
Debbie, If it is so easy and they make so much money why didn't you become one? oh thats right because of the uneducated bums had to build there business ... any successful realtor needs to know marketing..nothing is handed on a silver platter even though it seems that way...For someone that worked in the industry I am suprised on how uneducated you are about the industry...If you look at most agents that are number one in companies and have been number one over and over again they are not new to the business and have been doing it for years,. Yes years of working and building a customer base....Until you have to go out and actually find a sale you have no idea what it takes...In most markets you are competing against hundreds of other realtors.
With all do respect just because someone doesn't have a college or University degree doesn't make them any less capable of doing most jobs... most of the real estate agents I know actually have a post secondary diploma, some are even enginers... some people choose that profession because that is truely what they want to do and where there heart is. There a number of millionaires in the world that guess what didnt finish high school.
Debbie I am assuming you needed a job while you were in college its a good thing they had enough money to pay you so that you could go to school.
Posted by: kieth | Feb 17, 2022 1:36:17 PM
the problem with realtors is that its comission based on selling price. So for me as a home buyer why would a realtor try to get me a lower price when that would cut into his comission.there is no incentive for him to get me a lower or best possible price. One of the few advantages of a realtor is there access to comparable homes that sold recently prices.
Posted by: Jennifer - Burlington, ON | Feb 17, 2022 1:47:46 PM
A lot of black and white thinking here. When I bought my first home in Waterloo, the realtor held my hand throughout the process, took me through dozens of places and pointed out all the NEGATIVE things about it that I hadn't thought to look for, set aside at least 20 full days (I was driving in from Toronto to look at places, so she tried to maximize the time when I was there), and finally when I had narrowed it down to two places, suggested the cheaper one because she thought it would be better for me. And she gave me tons of information about owning, care and feeding of a home (I'd always lived in rented apartments before) and about the new city itself. I was buying a bottom-of-the-line entry level townhouse, and she treated me like I was buying a million dollar mansion. I think her comission must have worked out at something like $11 per hour! And out of that commission, she treated me to lunch in a very upscale restaurant, and came over after I'd moved in with a lovely housewarming gift. As I had difficulties over the winter (including snow removal problems with a bad back) she sent her husband over to clear out my driveway on particularly heavy snowfall days. When financial difficulties led me to have to sell the place less than a year later, she only charged me 1.5% commission (her 'friends' rate). She gave me tons of great advice about staging and showing the house, held 3 or 4 open houses, and again gave me the same service she would give someone selling a mansion. If I were ever to move back to the area, I'd use her services again, buying or selling, like a shot. Conversely, when I bought my current place in burlington, the realtor was more or less useless, and did no due diligence in finding out things about the house (for example, the wiring is only 60 amps, and when I suggested making the upgrade to 100 a condition, he told me that it was a bylaw in Burlington that no condo townhouse could have wiring higher than 60 amps. I later found out that this was completely untrue). When it comes time to sell this house, I will try it alone first.
And about these claims that all realtors are high school dropouts: I know several that have more than one university degree (incidentally, I have 3 master's degrees and have been unemployed almost 2 years - education is not a guarnatee of a job any more!) I know someone who has a PhD in nuclear physics who, after years of trying to get work in his field (they're not thick on the ground these days) got his real estate license. In fact, quite a number of people can't find academic work with their PhDs due to declining enrollment and university budgets, and real estate is a not uncommon second choice.
Personally, I'd never become a realtor, because it's just too much hard work! I had two parents in real estate, and they worked 70+ hour weeks, often with no income for weeks in a market slump.
Posted by: Bob V | Feb 17, 2022 2:15:52 PM
I agree 100% with Joseph's comments. As a consumer, you have choice..Choose a discount broker to try and sell your home..THERE IS CHOICE ON THE MARKET! As for the private sites sales, the true stats are that 99% of the listings posted there end up being sold by a Professional Realtor..PROVEN FACT!
So before you crtique the whole industry and TRY to undermine our abilities, know your facts!
Posted by: titl wayh | Feb 17, 2022 2:16:01 PM
Hey Let the realtors keep MLS Who needs it anyway
More and more people are using other internet advertising sites
its not hard to sell your own house. In a good market who needs a realto???r and in a bad market reduce the realtor fees off the price and the seller has a pricing advantage over listed properties in the area DUH!
Posted by: David | Feb 17, 2022 2:39:41 PM
Are Realtors worth the Money?
If a Realtor sells a home in a day and earns a commission, should the Realtor not be congratulated or should the Realtor tell the buyer to go away and come back in a month to do the deal? Doesn't the vendor want to have the home sold for the most money and in a timely fashion. No one pays a Realtor until there is a successful transaction. For all those vendors who employ a marketing firm will pay fees up front if the home sells or not.
There are numerous Real Estate brokerages that have different buisness models when it comes to fees. There are full service brokerages, discount brokerages, auctioneers, do-it yourself brokerages and the list goes on, which are all governed and highly regulated.
Oh and by the way, for those who think that all Realtors collect obscene commissions. I would suggest to those people quit your job, take the real estate course, find some clients who would want to deal with you, be on call 24 hours, have no benefits, no pension, no expense account and be competative in todays market. The competativeness of 98,000 members is what keeps Canada as one of the world's leaders in organized real estate.
Canada has one of the most successful if not the best MLS systems in the world. A highly regulated industry with the publics interest on the top of all buisness models thru out the country.
Be careful what you wish for!
Posted by: Liz | Feb 17, 2022 2:41:25 PM
I remember when a friend bought and sold about 12 or so years ago, she commented that their agent made out like a bandit on the house they were BUYING, but worked his tail off to sell the house they were SELLING. So I'd say it evens out. Our Realtor saved us from a serious problem years ago when we sold our first house. It SEEMS like you're getting fleeced sometimes, but I also think the process is fraught with some pitfalls. That's just my two cents.
Now that we're looking for rental properties in which to invest, we're more interested than ever in the whole process and how to invest in real estate. N. Xavier Arnold has a great book out, "The Best Real Estate Investing Method Ever" that uses a Participation Training process, to let people (students) work along with licensed experts, successful investors and student peers as they complete a real deal. And you do this from your own home -- I love that part.
Posted by: Glen - Edmonton | Feb 17, 2022 3:09:22 PM
Joseph the realtor likens his expertise to that of a doctor or lawyer? Please, if you're going to defend realtors at least do so rationally. You're much closer to the guy changing oil at that dealership you mentioned in that oil changes aren't that difficult either.
Posted by: Greg | Feb 17, 2022 3:14:11 PM
I am a real estate sales representative with a Biological Engineering degree. I chose to get into real estate to join my mother who has sold real estate for over 20 years and carry on a business she had built from the ground up working long hours and going above and beyond. I have been in the business for five years now and its this kind of uninformed rubbish that frustrates me to no end. I work hours that noone else wants to work...people seem to see what they want to see.
Do you really wish to emulate the U.S. system? I seem to get the feeling their real estate market has had a few catastrophic setbacks over the past couple years.
Out of curiousity who is going to spend the millions of dollars to maintain and regulate this MLS system that anyone can list a property on? Do you think that the commission that have been paid over the last 25 years maybe went towards creating a system that finally allowed the buyer to be fully aware of what is available. They had all this happen in the London area years ago and they had vendors selling their house twice, deceit and no accountability at all.
Perhaps being in a small town things are very different, because I don't see any of the obscene commissions you are talking about, and commission is always negotiable. I think people need to be much more informed on this and be careful what they wish for. I think I'll just move on and let you all fend for yourself just like you wanted.
Posted by: Sask Realtor | Feb 17, 2022 3:55:37 PM
Sales, Business, Law, Medicine, Pro-sports, Music and Entertainment. What they all have in common is that to be at the top you must always be learning, training, changing, adapting, and practicing to remain there. I'm sure the 80/20 rule applies to more industries than just Real-Estate.
That's how I run my Real-Estate business and the Competition Bureau's decisions are of little concern because I will adapt, offer more and different services yet again, and remain on top. The changes that come about will only make me necessarily better at what I do.
I suggest to any other Realtors following the Competition Bureau/CREA face-off with trepidation; if you are willing to work for it, whatever transpires will make you better at what you do. If that's not what you aspire to, then perhaps WalMart has an opening for a greeter.
Posted by: Ian | Feb 17, 2022 4:01:16 PM
Since when can you not sell your own home in Canada? Quit whining, cough up some cash advertise
the heck out of it.
Take your own calls at 11:30pm. Walk people thru again and again, then drive them around town for a few weeks and buy them a few meals. Accept an offer, and find out a week later they dont qualify. And a few weeks later watch them buy your neighbors house and thank you nicely for all your time.
Then and only then pay yourself a discount price, cause you dont know a thing about negotiating a deal and you sold it for less than what you owe.
You saved the world from a big bad realtor.
Posted by: Patti~Niagara | Feb 17, 2022 4:01:17 PM
I just love this discussion because it has been a sore point with me forever. I need to sell my house now but the thought of hiring an agent makes me involuntarily grind my teeth. I really don't care how that ridiculous amount of money is divided up. I do not believe the majority of agents have any more insight into actually selling a property than I do. I believe the "successful" agents are the mass listers. They belong to every organization in town and network the hell out of everybody. Eventually their listings sell and they collect the cheques. Actually marketing and selling is a rare occurence. Simply putting your listing on the MLS and an ad in the paper I can do. So tell me why we need to pay them again?????
Posted by: Observer | Feb 17, 2022 4:26:03 PM
While 'good' real estate agents provide many valuable services that other people could do themselves if they wanted to invest the time and energy, you still need a lawyer to close the deal. Being a realtor is sales and marketing job and not some kind of legal/consumer watchdog to save you from yourself -- you're on the hook when things go sour, not them.
Posted by: Daniel | Feb 17, 2022 4:28:58 PM
Finally ...the end of an insane institution is in sight...After reading the comments I have noticed that the realtors and 'friends' of a realtor comments have a theme...we work hard for next to nothing, and we are equal in stature to Doctors and Lawyers...' you wouldnt ask to look in your Dr.s or Lawyers files..' please give us all a break and go away, you are all a bunch of uneducated, useless, pompous, overpaid, cutthroat, losers. The way you people have inflated the prices of the housing market to meet your own financial needs and then have the gall to say ' it is only the fair market value' that dictates the price of a home is no different than any other cartel that controls the prciing of it s goods, through your greed, you have driven up the price of homes, to the point that people are now unable to purchase a home...you have hidden behind a 'psuedo licencing' format that will allow any idiot to become 'licenced' and further more through your own greed and idiocy you have created an 'industry that is so unwieldly it is collapsing on itself...who cares if you have to pay for this or that, to 'belong' to your industry..it seems you were all so stupid that you allowed your industry to create little regional fiefdoms to which you had to pay to belong....gee I wonder where the money came from to create and support these, useless overseerers, ...could it be from the hard earned equity of the homes people paid into over thier lifetimes...You are all a bunch of vultures who have been feeding of the long dead carcass of the home equity 'gold mine' you have depleted....go get real jobs that do someithing for society.....LOSERS!!!!