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April 12, 2021

Price war among realtors starts to heat up

Are we seeing a price war among the country's realtors?

Now that Canadian Real Estate Association says realtors can post listings on the MLS without handling the entire subsequent sale of the house, some in-your-face agents are jumping in with significantly lower fees.

One such maverick is Ontario-based Joe William, who claims his approach of placing listings for just $109, has made him “the most hated realtor in Ottawa.”

The cheap listing, which leaves the seller to take care of everything else, flouts rules put in place by CREA that, until recently, had discouraged the practice of discounting in this way. 

William's low-price tactics, which challenge the commission-based model followed by most real estate agents, have painted a bullseye on his back.

"Agents just don't like this model," he told the Ottawa Citizen. "They find it hard to compete. Most agents have grown up with the traditional model. So, when they see a house for sale they see a price tag of around five per cent."

As word has filtered out, more and more Toronto home sellers are jumping on board as well, William claims. A business professor at Ottawa's Algonquin College by day, he plans to take his discount model on the road: "We are getting tons of calls from the Toronto area. So, we are starting to put up listings in the Toronto area as well."

If we do see a price war among agents, it will not be an easy one to win, says Bernice Ross, author of Waging War on Real Estate's Discounters: How to Unlock the Door to a Full Commission.

Ross, who’s made good living coaching U.S. realtors on how to fight discounters has one central thesis: It’s all a big lie. Reducing the agent's commission doesn’t net the seller any more money.

Clearly though, not everyone agrees.

Are full service agents on their way out? Would you search out the Joe William in your neighbourhood?

By Gordon Powers, MSN Money



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...