Flat Fee Commissions are here to stay. Well maybe, Kinda sorta. There are Brokers that have jumped on the limited liability listing concept with enthusiasm. The Bulletin Boards are ripe with very polarized perspectives.
The Globe and Mail weighed in with Discount Days
The new rules allow agents to post listings on the MLS without seeing a deal through to its end. Before then, anyone who wanted to list a property needed an agent to see through the entire process and pay a commission that could run into the tens of thousands of dollars. http://www.theglobeandmail.com/report-on-business/discount-days-hit-property-sellers-market/article1528229/
Not far behind is the MacLeans Article that talks about the Realtor Racket. It is a conspiracy!
When it comes to Canada’s other favourite pastime, real estate, griping about realtors is right up there with gossiping about house prices at cocktail parties and picking out marble countertops. But in recent weeks, the backlash against real estate commissions has taken on a more urgent tone. The Canadian Competition Bureau has set its sights on the way realtors have, for decades, operated and charged for their services, and in February it filed charges with the Competition Tribunal claiming realtors are engaged in anti-competitive behaviour. http://www2.macleans.ca/2010/04/01/the-realtor-racket/
The newspapers can write whatever they like; That is the business they are in, Finding readers. If You have some time to spend, read the comments that flow from the articles. Whether we like it or not, the comments are bitter.
No one is talking about the banks and how much profit they made; How much they charge for interest on your visa or mortgage vs their gathering costs and Cost of Funds (paid on deposits) or the fact that when you pay a bill on line the money disappears instantly but the payment is posted effective 3 days later, Does anyone question the car insurance renewal? What does that industry pay?
Has the Travel Industry been rendered obsolete? Have stock brokers disappeared? No. Ok, so here is the real skinny, some Brokers have decided that marketing in addition to the MLS system is ineffective, so why bother. They are not spending any money on print and do not understand video syndication, or internet marketing, so they will list your house for a small fee. These have been around for years.
One particular Brokerage wants to list and handle 5,000 sales. Our TEAM (RE/MAX Realty Specialists Inc.,) did 4,713 plus transactions last year with 450 agents. Its not that I do not want to show their listings, Its that now I will need to contact the owner directly to book an appointment, or ask property details, I do not want to negotiate with an owner during the showing about how well they made the built in shelving under the stairs in the basement. I do not want to explain the offer clauses to you because you chose the cheapest forum for promoting your home. I will not assume liability in the negotiating process for my "explaining" things to you vs being the advocate of my Buyers, I do not want to call and ask the owner permission for a follow up visit. I do not want your client calling me for FEED BACK!
OOPS I slipped, I called them your client. And Limited Liability or not the courts will find you proportionately liable. I do not want an envelope addressed to me that is titled Govern Yourself Accordingly or Without Prejudice.
Wait, wait it gets better. Stan Gelman a seasoned Mississauga real estate lawyer and I discussed this briefly today and he mentioned, "very rare for a lawyer to draft a real estate contract usually we just fulfill the agreed terms." Stan remarked that he expects an absolute surge in lawsuits when all this cleverness and attempts to avoid the HST clutter the MLS system. We will be meeting later this week and I will have an update for you. Stay tuned.
Your comments are invited,