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Now I know that realtors have a bad rep with the members of this forum... and a lot of the concerns are legitimate, IMHO. When the deal is made quickly and easily (generally attributable to the miracle known as MLS.ca), the realtor pulls in a lot of profit without breaking a sweat. The commission structure varies from province to province, but usually incents the realtors to ensure that the house sells, period -- not necessarily selling for the best possible price.

But from the other side of things, I have seen realtors works their keesters off during a difficult closing. Cell phones ringing in the middle of the night, juggling multiple offers, dealing with demanding clients... it can be a tough business.

I have been dealing with a lot of private sales lately -- where the buyers and the seller have "sort of" hatched out a deal and come straight to the lawyer. They have been so difficult that I am considering referring these clients to another lawyer, or else insisting that they work with a realtor to put their contract (conditions and deadlines) in place, handle deposits, and release the keys. And if I see another self-drafted contract, I think I might just starting sneaking booze in to work.

So anyways, I came across this video and thought it was a hoot. Some language is offensive. Enjoy!

http://www.youtube.com/watch?v=WK_MErZfH0s
 

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Very funny...

I too have had conversations with homeowners wanting to rent out their place very similar to that :)

No pets, no smoking, no kids, no visitors, no noise, no parking, female 45-60, working professional.

Or my favourite wing ding landlord of all time... please find out when and where they were born so I can do an astrological chart and determine if they will be good tenants. :confused:
 

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The video was funny from a realtor's point of view but they still charge too much for what they do. It's not my fault they have ridiculous overhead fees to pay

They don't always even look out for their clients as closing deals fast always benefits them. I'm sure their loyalties often lie with their coworker who represents the opposite side of the deal

I think there is still a place for realtors but people should be free to see all current houses for sale, price histories and advertise online themselves is this day and age

And if I see another self-drafted contract, I think I might just starting sneaking booze in to work.
So you're a lawyer who hates to write contracts? Isn't that what you're being paid for, to help your clients with legal binding papers..
 

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Funny Video. It says episode 1, is there another video?

There is no value in the prices Realtor's charge to sell a home. Because of the all mighty MLS, they have the market in a choke hold. This is the ONLY reason why they get away with it. They can claim to do this, know that, ect, to make you believe paying $15,000 is worth their service. Then there is a conflict of interest to the buying agent: give them less than 2.5% and they will not visit your home to buy. It's a big miss and I wish the GOV would step in already. This is abusive towards homeowners.

I might look into one of those $299 full service listing add next year. Sounds about right price to post on a website, answer phone calls and fax a pre-made, paper offer.
 

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In all fairness, I think it's the real estate brokerage companies (Royal Lepage etc) that run the show. They set the commissions and dictate how the agents can work.

Regardless, it still sucks.
 

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If MLS access is successfully challenged by the For-Sale-By-Owner service package providers (Comfree and the like), then the MLS will end up just like putting your house up on Kijiji. Re/max, RLP C21 and all the others large brokerages are not going to cooperate. What will happen is the large companies will create an exlusive database and share amongst themselves - exluding FSBO's. The real victim will me be the thousands of independent brokerages with a handful of Realtors and a tiny market share (yet with a loyal and well served client base). Where the big 3-4 companies already occupy 60% of the market share, the selection of brokerages to list with will be reduced significantly. The larger brokerages will swallow their market share. This will not serve the public better than today.

And if you want to list or sell a home in the powerful, exclusive database, your choice is narrowed and the fee, will be the same if not higher.

Thoughts?
 

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This blog post encapsulates some of the issues for me:

(Disclaimer: not my blog post, and not a neutral point of view)

http://www.movesmartly.com/2010/03/competition-in-canadas-real-estate-industry.html

From the post:

One positive outcome of the Competition Bureau’s actions is that it could allow brokerages to offer a service to consumers (in this case, a flat fee posting service) that CREA currently prohibits them from offering. But there are many restrictive rules that prevent brokerages from offering innovative services of value to consumers and the Competition Bureau isn’t doing anything about one that really matters.

In order for flat fee brokerages to flourish in Canada they would need to follow the lead of the US model I just described above.

Unforunately Ontario’s Real Estate and Business Brokers Act (REBBA) has a clause that effectively makes it impossible for flat free brokerages to operate this way in Ontario. Section 36 of the Act states:

All commission or other remuneration payable to a brokerage in respect of a trade in real estate shall be either an agreed amount or percentage of the sale price……but not both….

The Act does not allow a brokerage to charge a flat fee for the listing portion of the commission and at the same time offer a 2%-3% commission to the buying agent. So if the listing brokerage wants to charge a seller a flat fee to sell a home, it has to limit the buying pool for that home to buyers without an agent or those with agents who are also charging a flat fee. This is a very small pool and as such guarantees any brokerage trying to implement a flat fee model in Ontario to a prohibitively rough start.

To be effective, a brokerage needs to be able to charge a seller a flat free without prejudicing the type of buyer they are able to work with. Until the Province of Ontario reviews the Act accordingly, consumers won’t benefit from the most effective flat fee brokerage model.


There's more interesting stuff in the post; a recommended read.
 

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OP, am guessing you are a lawyer.

here is my take. its not just the realtors that make more than what they deserve, the lawyers job is also relatively painless when they get well templated documents, although the fee they charge can be justified to some extent. 99% of the cases, the lawyer just reads through the customized template document and signs off and makes an average of 1.5k. the fee involves about 1 hour of meeting the client and 1 hour of going through the document. thats a massive 750$ per hour.

you say you are having to do more work with private deals, but isnt this what the lawyer is actually paid to do? i think with this the lawyer really "earns" his money. but its probably not a long time away for lawyers to have templated documents for such private sales as well!!!
 

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Have you guys ever worked in a customer-service-oriented industry in which you as a professional are professionally liable for advice given? There's a lot more to it than "just reading through" a document and signing off.
 

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Have you guys ever worked in a customer-service-oriented industry in which you as a professional are professionally liable for advice given? There's a lot more to it than "just reading through" a document and signing off.
i understand that. that is why i said 99% of the cases. maybe i am wrong about 99% but i am sure i am not very far off. if i am wrong, can you please educate me on what exactly does a lawyer do when he gets a well templated agreement? exactly, what kind of advice does a lawyer dispense? i dont recall getting any advice.
 

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David: I think if the big brokers did that, they would run into the same antitrust issues they are now with MLS.
But it would be harder to pursue through the courts, first because they gave up the MLS - they are not obligated to use it are they? If they want to have an internal listing database for their company, that is their legal right. To offer an exchange of database content to other cooperative companies, so be it.

We'll see.
 

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All commission or other remuneration payable to a brokerage in respect of a trade in real estate shall be either an agreed amount or percentage of the sale price……but not both….
Couldn't the selling agent just set an "agreed amount" for the other agent which will correspond to the desired percentage? Ie if the house will go for roughly $400k and most buying agents will expect 2.5% then the guaranteed amount for the buying agent would be set to $10,000.
 

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Realtors are like any other commissioned sales people. During the good times, they may not earn their money but during the tough times, they really have to scrap for every nickel. I have had good success dealing with realtors.

I have also observed my share of questionable behaviour. And I could make a humourous video illustrating those behaviours.

There is a bell curve at work. The question is: Does the median realtor do a professional job during a median market condition? I think the answer is yes.
 

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Well, I think the 99% estimate is a little high - but I'm neither a lawyer nor a realtor (but I've bought and sold my share of houses).

If you don't need advice, presumably you don't get any; I'm not sure that's a good way to judge whether you are getting value.

What you DO get, though, is insurance against error, because someone else is taking on the liability for ensuring the transaction is kosher.

As a side note: in my view, this is why the stand-alone fee-for-service financial planning model will never really take off in Canada. The real money in managing money is the ongoing annuity: the up-front, one-time cost of preparing a financial plan exposes the FP to total liability for a very limited return. It isn't really a workable business model unless combined with money management.
 

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OP, am guessing you are a lawyer.

you say you are having to do more work with private deals, but isnt this what the lawyer is actually paid to do? i think with this the lawyer really "earns" his money. but its probably not a long time away for lawyers to have templated documents for such private sales as well!!!
This was my question as well

I'm sure there is more to it than I see.. but come on there are only so many blanks to fill into a template. You're worse than the realtors if you expect to get paid thousands to sign contracts
 

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It's easy to say that "lawyers" or "real estate brokers" aren't worth their fees. However, if the market and fair competition exists, then we can deem on an individual basis what is "fair market value."

I don't think lawyers are overly paid for their transaction on real estate (no matter how much I grope), because they do incur high risks if things aren't done properly, and they do have to do due dillegence on land-transfer of the property. It does take time to do this properly (even with all the templates, etc.)

I feel the same thing for real estate brokers. It's not easy. My wife probably saw 700 properties, before we bought our home ... the real estate agents went batty. So it's not easy for some people. So not everything is straight forward, up-front profit. Sometime it does take time to buy a place and find something that you truly want,and so there are incurred costs. Do the real estate agents really deserve 5% on each transaction. Maybe not. But then again, maybe they really do. I say, open the practice. Make it transparent, then determine what's fair.
 

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The difference between real estate agents and lawyers (as my lawyer likes to point out) is that the lawyer will charge a set fee for services. The agent will charge a percentage of the sale value even thought the amount of work for an expensive house is the same as for a cheap house.
 

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I feel the same thing for real estate brokers. It's not easy. My wife probably saw 700 properties, before we bought our home ... the real estate agents went batty.
For people like me a % based is a rip off. I knew what I was looking for and bought a house after seeing a few that I narrowed down to myself. Same way I don't waste people's time when buying used cars. I'm there to see the specific vehicle, not to decide it it's the model I want or if I can afford it etc
 

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The initial complaint brought before the Competition Bureau was by Realty Sellers. Their MLS access was cut off for... listing all MLS listings for sale on their website. Which if you know anything about websites would have trashed all the other lame realtor sites that only include their own listings or even the Realtor.ca site which considered an advertising site by agents. Great deals are left on there long after they close yet never even made it on the site before they sold.

Particularly telling about agents and their supposed ethics was a memo passed around by CREA a while back telling agents that they HAD to show low commission listings as part of the measures implemented as a result of the Competition Board. So the reason that high commission brokers sell more houses is because of the collusion that goes on.

I don't hate real estate agents, but I hate the lies they try to pass off as truth, we're so professional, we're so essential, we are liable, when most of those things are untrue.

Less than a month of school does not make you a professional
Showing and selling a house does not make you essential
Filling out an agreement of Purchase and Sale is not rocket science.
The lawyers are the one who do the heavy lifting where the liability is concerned.

Do agents provide a service that should be compensated? Yes

I think a serious amount of attention should be paid to the entire house selling system as it exists in Canada.

The amount of fees that agents (these are the guys who actually do the work) pay to their brokers and to essential memberships should be seriously examined. I don't blame realtors for being upset. The agent I did an internship for even had to pay her broker to use the logo on her business card, desk fees, phone fees the list went on forever. Basically she was really broke after everything. So when you tell these poor guys being leeched at by every single level of the business that they aren't going to get listing commissions of course they're really upset.

You can't point to a very tiny minority of people who make millions and say realtors all do well. Any industry that churns the amount of people through their ranks like real estate does really need to reexamine their hiring practices. Most agents don't do well and most quit long before the 5 year mark. This has nothing to do with skill set either, it seems to me that only the most predatory survive.

This is an industry that skims 4-6% off 90% of every single house sale in Canada. This is terrible for consumers and hard working homeowners.

But the video was still funny :D

I too work for commission, I empathize with realtors troubles in many ways, but unfortunately there is no powerful cartel of 96,000 leasing agents to back me up. My service does add value for many people but I'm not delusional about how important I am not do I have to make specious claims about why my service is good for some people.
 
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