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
Posted by: Burak | Apr 12, 2021 9:30:00 AM
I find the usual 5 percent commission outrages. As a homeowner, when I sell my house say for 400K, I am supposed to pay a hefty 20K commission to the agent. The only reason why I have to pay such an amount is because of the cartel created by Realtor associations.
Also, I do not believe that realtors do their best to get me the maximum money for my property. They are usually inclined for a quick sale and book their commissions.
Posted by: R. Martin | Apr 12, 2021 9:44:58 AM
I have been watching this debate for a while now. I'm in the majority thinking the real estate fees are too high. Discounters have always been around but it was tough to find them. This has really seemed to put them in the forefront of everyones mind now.
I used one to sell my home at www.flatraterealtors.com. The cost was $995 but they did the entire deal. They actually did everything that any other realtor does so i really didn't have to do anything other than keep my place clean for showings.
Posted by: Merle | Apr 12, 2021 9:45:13 AM
The commissions are completely ridiculous, the agent who "sold" our house was useless in setting price. All they seemed to handle was the paperwork and running the price back and forth. Not at all worth the 5% we had to pay.
In the end we picked the price and listed it at a price both him and his lead agent said was too high. Both who have 10-20 years experience. Our final closing price ended up being higher than the price they suggested listing at. So on top of the fees we would have lost out almost $10K because they wanted to list it lower.
Then there was some problems on the day of close which I had to handle, had to get a hold of them.
The whole experience really left us sour on agents. Next time we will sell it ourselves, we pretty much did anyway, so I would definitely go with an agent who publishes on MLS for $109. Or even $1000 if they handle the paperwork to make it legal. But as for pricing and bartering I seem to be just as good as the professional agents.
Posted by: juri | Apr 12, 2021 10:03:10 AM
This nonsense that you need a realtor to sell your house must end, all you need is a competent lawyer, agents arent needed at all, the $109 fee is worth the exposure you would get on mls.
Posted by: Don | Apr 12, 2021 10:16:14 AM
I can understand the frustration with paying a high commission. That is why I purchased an Assist-2-Sell® franchise in 2008. I felt that I would like a break on commissions if I were not a real estate agent. So, now we sell based on a flat fee plus a commission for a co-operating selling salesperson if sold on the MLS® system. If the property is sold and listed by us, it will always be the flat fee. So far the response has been great. The biggest job is educating people that we give the same services or more than a traditional agent.
I beleive that some people will list at $109, some at whatever fee and some with the traditional models. It really depends on how involved you want to get and how valuable your time is to you. I feel that I offer a fair alternative to what's out there and can represent my clients properly. www.assist2sellmoncton.ca
Posted by: Kevin Sullivan | Apr 12, 2021 10:29:55 AM
If you use a real estate agent and agree to a 5% commission you only have to pay 5% if the realtor brings you an offer of the full amount with no conditions. And we all know there are always conditions. Well if the realtor has not brought you exactly what was agreed upon you can refuse the offer or accept offer but renegotiate the commission because they have not lived up to their side of contract. I have done this and most will knock the commission down to complete the sale. They may say no at first but dont back down.
Posted by: Jo-Ann Ruffolo | Apr 12, 2021 10:48:32 AM
Real estate agents have enjoyed a long ride of inflated commissions, but it is time people realise how easy it is to sell yourself and save thousands of dollars. Their services have declined over the years and it is outrageous to expect 5%. Like the above said , all you need is a lawyer to get you through the process. Property Guys is one example. They help you out and you get to keep your money in your own pocket. Its so easy. I will never deal with agents again.
Posted by: Deb | Apr 12, 2021 12:32:36 PM
Cartel???? Are you serious? BTW there have ALWAYS been discount realtors, FSBO'S and angry vendors trying to rip people off. If you don't have a realtor with errors and ommissions insurance and a professional duty to represent then good luck. People here want to paint the realtor as the crook. I have met more dirty dishonest vendors in my 20 years in the business than I can shake a stick at. It's a d#@#mn good thing there have been realtors working as intermediaries to keep things above board and prevent buyers from being taken to the cleaners by people claiming things about their own homes that aren't true ( like the measurements of the home or that little leak that happened a couple of years ago ). I guess it will take a few lawsuits to work out the kinks on this one. In the meantime, we will still be working our tails off showing, listing and selling houses and working all kinds of late night round the clock magic to make sure that the deal goes through. I come from 3 generations in the industry and this is just another day in the life of a realtor. Nothing new. Oh, and good luck with Mr. Williams if your deal goes sideways a couple of days before possession because the buyer didn't realize he/she was supposed to get some forms signed somewhere by somebody and possession gets pushed back a month or so. Or the buyer bails and moves back to Pakistan while you are busy hiring movers and packing. Or the vendor tidies up his mold infested grow-op before he sells it to you the unsuspecting buyer. Who are you going to chase down then? Everbody is an expert until things go sideways. Keep in mind that the author of this article would prefer that you put your money into mutual funds than real estate. Good job you havn't depended on him over the last few years to make your retirment fortune!
Posted by: The beauty of the deal. | Apr 12, 2021 12:50:38 PM
Anyone is a good salesman in a seller’s market! A stagnant market will bring out those who can "Close" the deal.
Posted by: unfair | Apr 12, 2021 1:26:18 PM
Do you realy trust the puplic that is selling their own.How many buyers will be taken to the cleaners!
Posted by: Ross Estell | Apr 12, 2021 1:55:44 PM
I just sold my place and the realtor talk me into lowering my price 3 times, at one time i was offered 422k for my house and ended up selling for 370k. all they seem to tell you is lower your price. I think they should work harder for there money, not talk us into lowering our prices, my fault totally. i will never use a realtor again!!!!!!
Posted by: Do It Yourself | Apr 12, 2021 2:10:11 PM
I just sold my house on Comfree. This talk about the agent getting the best price is just that talk. I was given a value on my house by three agents and they all told me my asking price was too high. Well I got my price on the nose and saved $15,000 in commissions. When I invest I pay my financial advisor a small fee for managing my money! Why would I pay these bandits more for my biggest single investment. It's about time and too bad for the easy street they have been living on. Here in Winnipeg they list and sell immediately due to the bidding wars. They do nothing and rake it in. I folled them all.
Posted by: For Realtors | Apr 12, 2021 2:31:56 PM
Listening to everybody complain about how much realtors charge is so silly. They charge a lot because they actually do a lot! They spend enormous amounts on advetising your house so that it gets the most exposure to the public. Also, as for people selling thier house for more money than what the realtor suggested they originally listed for and the sellers complaining they would have lost more money from the sale, the realtor still would've gotten more as well. In fact, it would probably have gone into multiple offers. Then the realtor can provide advice which offer to accept when looking at the terms, conditions and subjects. Price is not everything when negoiating. As a seller, you want to know closing dates, financing, etc. Sellers should not be so nieve thinking they can do a job equally as well as somebody who has spent years an experiencec with hundreds of different transactions.
Posted by: Really | Apr 12, 2021 2:32:46 PM
Not too hard to "folled them all"????? in a hot market in Winnipeg right now where there are bidding wars and auctions. Who knows, if you had listed with a good realtor you might have actually ended up netting more than you did. You never know.... As for these" bandits", they will still be there working hard for you when the market turns making sure that you get the most money in the shortest amount of time. As for Ross, why didn't you take the 422k hmmmmm? Is it because you were smarter than your realtor and greedier than the market would bear and decided to hold out for more, then the market turned on you ? You gambled and lost? You should have taken your first best offer. Instead you were greedy and now instead of blaming yourself, you are blaming your realtor. Like THATS never happened before. I think you not using a realtor ever again will be doing all the hard working realtors a huge favor. They won't run their tails off for someone who won't listen to their professional advice. Besides, the market dictates the price, not the realtor. If you sold your house through COMFREE "Do it yourself", then that is proof that there is competition already in the market. All the power to you. Sometimes you win, sometimes you lose. Realtors have the market stats. They are human. They have no other reason to underprice your home oter than trying to get it sold. They actually get paid more if your house sells for more. BTW buyers, these are the HONEST folks you will be dealing with....sellers who are looking to "folled them all."
Posted by: ed pryla | Apr 12, 2021 3:19:32 PM
discpount agents are usually unsuccessful agents that couldn't make a living in the business.they think that by offering a fee of 100.00 or so they will do a huge volume and make a lot of money.fact is that the most successful realtors mabey list 40- 50 home a year.these guys doing discount will have to list 1,000 homes just to make 100,000.00 gross commission and they can't run a business or live on that.also remember that the agents pay fees to keep the mls system running if agents are forced to discount commissions to these levels the whole system will cease to exist.....think about that.
Posted by: Joe | Apr 12, 2021 3:37:49 PM
I have owned several houses over the past 20 or so years. I have used a realtor almost everytime and was very pleased with my service, Our agent had a great knowledge of bank rates, lawyers to use house inspectors, the buyer were always pre-approved etc etc, I did try to sell a couple of the houses on my own Privately, but it was a night mare. I called my Re/max agent and he came in and got the job done for me! I found that my realtor has always offered his services on a kind of sliding scale commission . This set rate of commission of 5% that a few people have mentioned on here would be a worse case scenerio. The last time I sold was last year, and my agents total commssion was only 2%... exactly as he promised. keep in mind one home sale is not the same as the next! sometimes the house sells in days and other times it can take months! My suggestion is interview a few agents and see what they have to offer. The Big names and the big teams always seem to be the higher priced ones when I was searching. I found a guy that was a one man show that works for Re/max.. he was the guy we spoke to at every level. very professional, and we felt very very comfortable and would recommend and use him again!!! My advice look for the guy that advertises negotiable and competitive!
Posted by: Sam | Apr 12, 2021 3:48:36 PM
Now Now Now! everyone relax! if you think for one minute that some can sell your house for $100 or some other unheard of low price, there is gonna be a "BUT" along with it...anyone ever heard of a loss leader! take for example... a car commercial on tv, saying you can own the brand new car for only $99 per month(LOL)....read the fine print people that car ends up costing you $500 per month.! all of these discount agents are gonna have nothing to gain by listing your house at $100 when it costs them almost that to post it.... do you go to work for free?????? i did'nt think so.... i have been building houses for years, and tried to sell them my self..talk about a hassle. I got myself an honest ,negotiable and experienced realtor and have used them for years! thats the problem with this country... what happened to honesty and integrity! .............. my experience says find a good agent, and negotiate. even better get one that will out line the exact costs and expences that he will have to pay...ever advertised in a news paper these days??? it is out rageous.
Posted by: cam | Apr 12, 2021 5:08:18 PM
I agree with the majority of the comments. Agents have had it too easy for too long and they expect 5%. Perhaps if they had to actually work for the fee I could justify it but come on it is time that this cartel opened up, even the government is saying so. I agree that agents have to make a living and they do provide a service but perhaps it is time that the commission came down to 3% or stager it like in BC where it is 7% on the first 100k and 3% on the balance. I am not sure what a "fair" commission schedule is but 5% flat is no longer fair with homes in the 300 - 800k range.
Posted by: Tony | Apr 12, 2021 5:15:10 PM
This sell your own home stuff is nonsense. I believe realtors are worth every cent that they charge. There is a lot more to selling your house than listing it on MLS. The only winners with sellers trying to sell their own homes will be lawsuit lawyers. There will be lots and lots of suing going on. Their are a lot of crooks out there. Sellers beware of letting potential buyers in your home without a realtor. Has anyone heard of home invasions, robbers, thats what you will get when you let strangers in your home. Smarten up people!
Posted by: Paul Beith | Apr 12, 2021 6:21:18 PM
I was very concerned by the poor enforcement of real estate
agents' regulations that I saw. Selling privately is usually better.
The services of real estate agents in Canada are usually not
worth the commissions.