Real Estate Talks

Realtor.ca is really just a lead generation portal for Realtors - it's not like Realtors are providing it out of good will. IMO, it's informative and easy to use enough. What makes it anticompetitive is that Realtors intentionally hides some of the critical data - time on market and sold prices (which forces people to use Realtors)

Realtors think they're entitled to it because they pay for the system. We think it's a smokescreen that Realtors put up to hide their true anticompetitive intentions.

I appreciate that Realtors have a ton of fees and may not do a deal every few months. What matters to consumers is what comes DIRECTLY out of our pockets though. Can Realtors honestly say that the actual # of hours of work they actually put in is worth tens of thousands of dollars? Again, TOTAL amount of work and NOT the duration it spans. Without the current state of the monopoly protecting them, there's no way they are able to charge so much.

As much as they can tout about how there's no price fixing, most Realtors don't deviate much from the 'going' rate. (ie: instead of paying you $15k of commissions, I get to pay $10k, whoa, thanks!)

Discount Realtors and mere postings don't work because of the limitations imposed by the monopoly. So in the end, the choices really are limited.

Can Realtors honestly say that the actual # of hours of work they actually put in is worth tens of thousands of dollars? Again, TOTAL amount of work and NOT the duration it spans.

Prices are set by supply and demand, not by how much work is put in, unless it is hourly paid work.
Besides, realtors are only paid when there is a successful transaction.

Can a buyer honestly say that after been shown 50 houses over a 4-month span and having a realtor negotiate unsuccessfully 2 or 3 lowball offers... that the realtor's time, car expenses such as gas, wear and tear of his car...really not worth anything?

Or, can a seller honestly say that after a realtor who carried the listing for 6 months or so, and negotiating unsuccessfully reasonable offers at market value which the seller would not accept... that the realtor's time is really not worth anything?

Discount Realtors and mere postings don't work

Discount listings work very well if the discount comes from the listing end and NOT from the selling end.
Mere postings will work better than non-MLS listings in FSBO sites... that is IF mere posting listings are EVER allowed on MLS.

Prices are set by supply and demand, not by how much work is put in, unless it is hourly paid work.

The current rates are not possible without the stronghold by the real estate cartel, so prices are driven by the monopoly - NOT supply and demand.

Realtors don't hold inventory, they're just trolls in a tollbooth. In fact, there's \ an oversupply of realtors. Many of them aren't getting rich for sure, just enough to feed their families - do 1 or 2 deals every couple of months, pocket an average salary of maybe $60-80k after expenses, call it a decent year. Demand for realtors is partly driven by how active the market is, but more so because there's not many other choices if people want to buy or sell easily.

Again, I'm arguing from the perspective of the consumer. The cost of a service should be more proportional to the amount of effort required, level of expertise, how 'rare' the expertise is, etc. Good Lawyers and Surgeons can charge thousands for a few hours of work because of years of education and practice. Realtors... online course, get 65% on an exam, off you go. Yes, there are realtors who are more experienced than others. But still, without the monopoly protecting them, there's no way they are able to charge as much as they do today.

Can a buyer honestly say that after been shown 50 houses over a 4-month span and having a realtor negotiate unsuccessfully 2 or 3 lowball offers... that the realtor's time, car expenses such as gas, wear and tear of his car...really not worth anything?

It's worth something, just not $15k (say a $1M place ... ~$15k just for the Buyer's agent).
50 houses x 1 hr per house (including commute) = 50 hrs
3 lowball (unaccepted) offers x 2 hrs per offer (filling out some forms, emailing them over, ? negotiations??) = 6 hrs
$10 for gas per house visit (including wear and tear - i thought realtors like to lease cars tho) x 50 houses = $500 car related expenses

So... $15,000 - $500 of car expenses = $14,500 / 56 hours = $260 / hr

And yes, I know they still need to split some of that with the many layers of the cartel, plus taxes etc. etc. But my point is, the amount coming out of the consumer's pocket just doesn't make sense. (Please don't rebut by saying the Buyer didn't have to pay anything)

Or, can a seller honestly say that after a realtor who carried the listing for 6 months or so, and negotiating unsuccessfully reasonable offers at market value which the seller would not accept... that the realtor's time is really not worth anything?

I bet you this Seller's agent probably worked less than the Buyer agent example above.

Discount listings work very well if the discount comes from the listing end and NOT from the selling end.

$ is $, not sure what you mean.

Mere postings will work better than non-MLS listings in FSBO sites... that is IF mere posting listings are EVER allowed on MLS.

You mean this mere posting isn't allowed on the MLS? http://www.realtor.ca/Residential/Map.a ... r=x3356557

Realtors, on average, are paid fairly. The problem is not their income. I don't begrudge anyone a fair income.

What pisses me off is that the whole industry is insanely inefficient. real competition would force them to re-evaluate how they do things. Maybe they'd start by actually requiring all realtors to be actually professionally certified with qualifications that actually has some teeth to it.

Maybe we'd have our own version of the same great tools and technologies that they have south of the border.

Brokering a million dollar deal is going to cost some money, I think it's easy to lose perspective on the monies involved.

There are discount and smaller brokerages around. Sellers have a choice, and seem to like the branding given the significant market share of the top 5 brokerages. No surprise there's a markup: the tribe has spoken. Sales info isn't going to change that.

oli wrote:

$ is $, not sure what you mean.

Commissions have a listing portion going to the listing agent, and a selling portion going to the buyers agent.
You can negotiate the listing portion all you want, it won't affect the sale for as long as the listing agent is willing to take the listing, but it is not wise to reduce what is going to the buyers agent. A buyers agent won't be very happy if he gets $2,500 from selling your home when a similar property will give him $8,000

I bet you this Seller's agent probably worked less than the Buyer agent example above.

Absolutely. A buyers agent on average, works 3 times harder than a listing / sellers agent to produce a sale.

You mean this mere posting isn't allowed on the MLS?

If it was a mere posting it would not be allowed.
The Competition Bureau was fighting hard to convince the CREA ro allow mere posting listings. The CB wanted a seller to be allowed to just list on MLS and include as much or as little info as he wanted. The CB wanted realtors to be allowed for a fee to list a property without really checking it and let the potential buyer do the checking, similar to an ad you put in the Vancouver Sun, with a provision that the information is not guaranteed and that this is only a mere posting listing. The CREA and RE boards came back and said they would not allow a listing unless the listing realtor is:
1. Responsible for the accuracy of all information entered regarding the property
2 Follow up the selling process and report to the RE board when the property is sold with details of the sale or if it is taken off the market
On top of that, the contact info of the seller was not allowed on realtor.ca although other realtors had access to the seller contact tel. no.
CREA and the RE boards won, CB lost.

So, if the realtor is responsible for the accuracy of information, he has to follow up the sale process and has to be contacted if a member of the public wants to see the property... that is not a mere posting listing, although you can call it that or whatever else you like.

"There are discount and smaller brokerages around. Sellers have a choice, and seem to like the branding given the significant market share of the top 5 brokerages. No surprise there's a markup: the tribe has spoken. Sales info isn't going to change that."

Except that it will. You only have to look at the US and the tools they have which are far superior to what we have up here. That's because the canadian realtors have a monopolistic hold over the data.

I am willing to generally agree that there will be a drive towards quality. But the fact is the quality is slow, dumb, and efficient because they don't know any other way. Competition will wake them up and they will get even better.

Competition is unlikely to drive house prices down in this case. The US is a prime example, desirable areas are not cheap. It might make for a more informed choice and less sale price spread, but I doubt the average moves much

Thanks for clarifying Silverman.

I think all your points support how nearly impossible it is for FSBOs to work in today's model, which again, show how the RE industry uses its monopoly to their own advantage.

1) Even if the FSBO can save on the listing side of the commissions, Buyers are usually represented by a Realtor (because on the surface, it appears to be "free") so the FSBO will still need to pay the Buyer's agent.

2) The way mere postings work today still needs to go through the middleman aka a Realtor. So it's up to the discretion of the Realtor to actually pass on potential buyers. AGAIN, even if the so called mere posting finds a Buyer, most likely they will be represented by a Realtor so they will still need to pay commissions to the Buyer's Agent.

1) Even if the FSBO can save on the listing side of the commissions, Buyers are usually represented by a Realtor (because on the surface, it appears to be "free") so the FSBO will still need to pay the Buyer's agent.

Yes the FSBO would still have to pay the buyers agent, but this is not too bad, considering the tremendous exposure the MLS provides. The more exposure, the more the potential buyers which means a higher price for the seller. A higher price could easily cover the cost of commissions and in a hot market provide the seller with quite a bit more net $$$. In a weak buyers market could be the difference between selling or not.
You want your house to be attractive to the buyers agents, that's why some sellers offer bonuses over and above the normal commissions.

The way mere postings work today still needs to go through the middleman aka a Realtor.

Yes, that's why I said there is no such thing as a mere posting listing. Maybe some day, but not right now. The Competition Bureau was trying really hard to get them on MLS but they failed.

Yeah, well, in time! First the CB has to deal with the TREB. Once we open up things to people not controlled by realtors, the technology will improve and we can get listings in places other than realtor.ca

Actually there are some virtual office website in Toronto such as http://home.ca/for-sale which offer complete access to the MLS listings and in fact is updated every 24 hours with listings up to 3 days faster then on MLS.ca. I think the data will open up and one day be available for everyone to see. Technology and the internet has revolutionized every other industry so I think the real estate industry will change as well.

1word. Negotiations. Why do the haters always leave this out.

Case in point, just did a deal before we left. The homeowner, a great guy, tells me he has vast experience negotiating. He tells me he can out negotiate any realtor. Fine. We move on.

The day of offers comes. We get 4. I ask him what he wants to do. He says counter the best one and do the deal. He is also getting noticeably stressed out. He has forgotten the emotions involved in ones own home.

I show him 3 different angles that are better. He receives hundreds of thousands of dollars over ask and is thrilled beyond words. His wife laughs, elbows him, and he apologizes for 'knowing everything'.

I get why people think Realtors dont deserve the paycheck but my suggestion is lose the ego and win. If my stockbroker charged me $25k but brought me $300k I'd kiss his feet. It wouldnt matter to me if it took him 1 day or 2 months either.

Dont pay the commish to just anyone. Do your research and hire the right professional. Happy new year all.

Nobody said realtors don't deserve the paycheck. What they don't deserve are economic barriers to competition.

economic barriers to competition.

With 9,000 realtors in the Lower Mainland competing for your business, hundreds of offices from full service & commission to partial service & commission, to flat rate offices, to 1% types brokerages... nope there is no competition at all.