Are full-service realtors on the way out?
Will most of the country’s 100,000 real estate agents soon be replaced by U.S.-style budget operations, in the same way that upstart online brokers muscled their way into the financial industry a decade ago?
Probably not, but things are certainly heating up in the discounting market.
As technology and deregulation lower the barriers to entry here in Canada, upstarts flat-fee discounters and even general purpose sites like Kijiji have been capturing a bigger piece of the listings pie.
Now, in the hope that they may be able to steal a bit more market share, two of the industry’s biggest discounters are joining forces, the Globe and Mail reports.
Propertyguys, a company that helps people sell their own homes, will merge with flat-fee brokerage Realtysellers Real Estate later this month.
Aside from building critical mass to take on traditional brokerages, the deal should also make it easier for those who want to handle their own transactions to get their properties on the Realtor.ca site, which provides the online listings for most of the country’s home sales.
And while such new competitors clearly haven’t been able to cut established players out of the process yet, the traditional agent's role and the accompanying costs may have to change.
Moving your own house isn't like selling a bike but, with the emergence of such a larger-scale discounter, perhaps more people will consider selling their houses on their own.
Do realtors still earn their keep? Are changes like this a further enticement to selling your own home? Have you already done so?
By Gordon Powers, MSN Money
* Follow Gordon on Twitter here.
Posted by: dean | Jul 7, 2021 12:27:31 PM
I sold my house last year with comfree. I saved over 34K in Reator commissions. The realtor kept trying to get me to list with them saying I would get more for my house.Yeah right.
I house 2 blocks away was identical to mine except They had a 3 car garage and I only had a 2 car. Mine sold for 48+k more than theirs. They also had to pay commissions. It took 22 days to sell my house. It, of course had to be kept spotless ( like the realtors listing down the street) I had 24 showings and 3 open houses. I spent less than 30 hours selling my home and saved more than 34K. That is AFTER tax savings of 1000 per hour. That is a good wage if you ask me.
Go to MLS and look at the listings. Many have only a couple of pictures and many times the mapping is wrong. What exactly do you need a realtor for?
Posted by: Joanne | Jul 7, 2021 12:38:29 PM
No doubt the process with a Real Estate Agent comes with less headaches and less work for the owners. However, the fees are simply too high. With a negotiated fee of 5% for a $500 000 home will cost $25 000. That is simply too high compensation for a typical home that will likely sell within 7-60 days. There are way too many agents out there who treat this profession as a hobby and are happy to sell 1-2 homes per year. Still not a bad return for very little time spent promoting their listings. Who cares if they are always on call on weekends. They knew that from the onset.
Posted by: Huh? | Jul 7, 2021 5:08:34 PM
Real estate agents are nothing but a scam. First, they will always try to get you to sell for a little less than market value. Why? Because compared to making another $1000 income it is much better for them to simply sell your place in one week instead of 1 month and get 15k instead of 14k for example, but that difference is 10k or more out of your pocket. And they have every excuse in the book for why people shouldn't sell themselves. All of which are baloney. Ask any realtor what sells a house and they will tell you correct pricing. Well with a little research you can price your house correctly yourself. Keep your place looking good and get a good lawyer and you're set.
Posted by: Realist | Jul 8, 2021 10:23:55 AM
A friend of mine was in real estate years ago and made a comment that I will never forget. He stated that, I have to laugh when listings proudly state "Sold in 2 days". When I see that then I know the house has been under-valued by the realtor in order to get a quick sale.
Posted by: Former 26 yr. R.E. Agent | Jul 8, 2021 11:30:55 AM
Having been a real estate agent ( semi-retired now) for 26 years in Toronto, there are presently over 29,000 licensed agents on the Toronto Real Estate Board ( largest MLS board in North America) which is a joke to say the least. However, most of the agents that I knew and know are furious that these discount brokers are getting the medias attention, which in turn is read by the general public at large, hence, makes them think twice about the 6 or 5 percent commissions they have to pay to an agent who can't get a REAL job in real life. Very few agents are good at what they do ( fact: 5% of the agents do 90% of the business) and the rest of them are walking law suits waiting to happen.They are uneducated, lazy,have no professional negotiating skills, atrocious mathematical skills, pathetic time and money management skills, totally unorganized, unpolished and unprofessional people communication skills and they want to be regarded as "professionals"? Most of them owe back taxes as a result of undisciplined money management skills as well.
In 1991 I tried to lobby these TREB agents into phasing out these price fixing fees of 6 or 5 percent and phase in a "fee for service structure", a facsimile of doctors, lawyers, dentists and alike, and I almost got shot for even entertaining the idea. Made sense to me; get paid for what you actually do and perhaps you may have to actually work for a living! In 1993, the U.S. National Association of Realtor's President said to a national conference crowd, that with the introduction of The Internet, realtor's and their agents have to be aware that their industry is about to change big time and what has been a long term tradition in the real estate industry is about to bet a rude awaking, so you better re-shuffle your cards or you will be out of the game.
I am no longer in the business of course, and I have always agreed that 95% or these licensed agents should not be in the business at all. It has always been my opinion that these 6 and 5 percent commissions are totally outrageous. With home prices the way they are, there is no way you can convince me that any agent is worth $60,000 on a sale of a $1 million dollar home!!!
I truly hope that every perceived discount broker out there takes a big chunk out of the real estate industries market share, as it should have happened twenty years ago, if all of them would have listened to me in the first place, this wouldn't be such a big deal. For those agent's and brokers who are bitter and upset, time to get a real job like everyone else. Welcome to a whole new world!!!
Posted by: retirement homes toronto | Jul 9, 2021 1:16:50 AM
No doubt it is true. I am totally agreed about you. The real estate agents are really a hack for us. They are just help you in making ur pocket empty. Thanks for sharing such a good blog with us
Posted by: Kim | Jul 10, 2021 1:02:09 AM
we used a discount broker in BC mainly becuase we wanted to save the commission....I have always felt that realtors have made too much on commission for selling a house in the previous market as most homes seemed to sell themselves...not much work appeared to be put into on the realtors part.
after this past experience with a discount broker...I have to say that we have now ended up with a regular broker. we felt the service really lacked with the discount broker...their marketing stratagie seemed to be to keep lowering our price in order to sell our home. They did not place newspaper ads nor did they utilize social media and they reluctantly did open houses.
they stated that qualified buyers only come from other agents or through the mls. this may have been true in our previous market but in a flatter market I think its important for a realtor to be open to other sources of bringing in buyers.
basically we were told by them that their job was to educate us ; even though we have bought and sold three different homes, and that when we were hessitant to lower our price even though our home was the lowest priced house in the area, we were labled non-cooperative.
it was hard to hear their advice objectively because of the condescending attitude. We went back to our former realestate agent and negotiated a different commission and so far we are happy with our decision...we feel like she is selling our house with us and she will work hard for us.
Posted by: Debra | Jul 10, 2021 6:19:53 PM
I had a home for sale with a real estate agent. He tried to SCAM me big time. First he had a friend of his who wanted to buy this home. Secondly, he was adamant to list it at about $7,000 below market value.
Third, he told us he has a buyer!!!
My husband told this "a**hole" realtor to increase the price to $7,000 more. We should have ditched this a**hole.
The bottom line is - if this a**hole lists the property and sells it himself he makes ALL the COMMISSION fees. He DOES NOT CARE if we lost money on the deal!!!!
This is a true story and I am living in Lethbridge, Alberta.
Posted by: binder dundat | Jul 10, 2021 8:30:38 PM
I am all for more competition and lower rates, but the one thing that I did find was that many people who try to sell on their own are actually very greedy and over price their house. I entertained the idea of buying private previously but I wont until they actually price within the market.
Posted by: Ed | Jul 10, 2021 8:42:55 PM
I understand there are many bad agents out there who take advantage of there clients. But let's not completely discount there worth all together. Prior to 2010 it was really easy for any high school drop out to become an agent. Under the new revised qualification guidelines any new prospect seeking a career in real estate must have a minimum of a high school diploma, or some trade certification from the government that establishes a certain level of competency. Hopefully this will start to help weed out the dreamers. Also you can also argue the worth of many over paid professions. There are many people out there that dont have the time to sell there homes, or just don't understand contracts and all the legal paperwork involved.
Posted by: Mike | Jul 10, 2021 9:30:05 PM
For those of you who are complaining about the commissions seem to not realize that these agents are not pocketing 5 or 6 % of these commissions. by far most of the time they are splitting those commissions in half with the buyers agent. And then they are handing over another 20 to 30% of there 50% to there broker, which actually only gives them about 20 to 30 % of there 5% original commission. So on a $ 400,000 listing they are only getting about 7 to $8000.00 out of which they pay there advertising expenses, gas and time and and there monthly 1000.00 desk fee to the brokerage. This is the cost of doing business, don't crap al over the agent for the commission costs. Complain to your government and banks for the rising cost of inflation of everything.
Posted by: Alan | Jul 10, 2021 10:37:37 PM
Right on Mike...but add onto that they don't get all of the $7-8K. The government is going to tax them on that income.
Posted by: CuckholdDon | Jul 10, 2021 11:33:58 PM
Binder is right--The RICH(who of course don't reconize they are rich) are the Whiners about real estate agents& others earning(decent) money(they are supposed to have all the money!
These are the same folks who say"I CAN"T AFFORD TO PAY 1 DOLLAR MORE IN TAXES " Even if it would meen old age pentioners or disabled people would get at least Poverty level money to live on!
The same folks who own bussnesses& pay min. wage(& sometimes less) while living the High life-Telling employees the "Can't Afford" to pay a living wage!
To me--People who sell thier own house seem like folks who "Curb Cars"-Not the most likely folks to tell you the whole truth!If you've never had a bad experiance buying from a curber-you've probably know someone or heard horror stories!
Before you say this is sour grapes--I nor any member of my family are in real estate& I'm a home owner--Have owned 9 homes in total!
Posted by: GJ | Jul 13, 2021 7:21:04 PM
Tell me, how much time does it take the agent to sell one house? If I pay $100 per hour, that will be fair wage, right? How do they justify needing to make 15K on an average house?
Afterall, it is not a job which requires much education.