Canadian Realestate Magazine forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Investors win new Realtor commission option

Notify me of new replies via email
Guest | 08 Aug 2012, 02:09 PM Agree 0

A new website developed by Edmonton-based Giorgio Lupinacci allows owners to sell properties at the best possible rate, by letting real estate agents “bid” for the sale by offering competitive commission. The Realtor offering the lowest rate gets the sale, allowing homeowners more flexibility when selling – and more profit. For the cost of $99.95, Realtors can bid on 30 properties much like a silent auction, a concept that spawned the idea of BidComHomes.
But even going the traditional route, investors can and should negotiate, say experts.While sellers can expect to pay a standard commission  of 2.5% to their own real estate agent and another 2.5% to the buyer's agent, there is room for discussion, said Oro Properties President Cindy Wennerstrom. That’s regardless of whether the realty service is offered online.“This rate is 100% negotiable,” Wennerstrom told CREW. “For instance the listing agent may decide to try to list your home exclusively for 3.5% - 4% first before they go to the general MLS network. In this case, they use their personal resources to sell your property and do not pay commission to another agent.”A less successful strategy for investors to consider is offering the buyer's agent less than that standard 2.5%.“You will likely get fewer agents bringing their clients to your home if you decide on such a tactic,” said Wennerstrom.She was also quick to point out that negotiating a lower rate can also mean you get less for your money. “In essence, if you are going to a website to have agents ‘bid’ on a commission to list your home,” said Wennerstrom, “you need to know exactly what they will be providing in return and to what standard or quality level.  If it seems too good to be true, it most likely is.”
  • gord j | 09 Aug 2012, 05:34 PM Agree 0
    Any Realtor can put a listing up on MLS and wait for the phone to ring. But only a good realtor has the experience and in sight to develop a strategy with the seller that maximizes the net income from the sale while minimizes the stress on the seller. Depending on the market, location, time of year, the seller's risk taking appetite and how quickly he needs to sell, a different strategy should be employed. At the end of the day, it is how much net amount the seller gets that trumps the amount of commission he pays. Many experienced sellers would rather settle for a couple of thousand dollars less than putting up with a protracted period of daily showings and open houses.

    Some sellers would readily equate selling a home to having a tooth extracted or undergoing minor surgery. Would you choose a dentist or doctor based on the lowest bid on a website?

    After all, most credible realtors get more business from referrals than they can handle. They don't have the time or the need to bid.

    Bottom line, would you rather hire a cheap realtor or a good one. The choice is yours.
  • BILL BECSKEREKI | 09 Aug 2012, 05:49 PM Agree 0
    Sounds OK for the bigger cities with bigger prices, but in the part of Niagara which is my marketplace the average price is $204,000. We would end up with little commission.
  • being there | 09 Aug 2012, 06:20 PM Agree 0
    Hope this career of "realtor" will desapear soon. If a willing parent can teach own children, why a willing owner can not sell own property?
    Many realtors are too expensive, have no ideas how to value a property other than compare what has been sold in the area, don't know much about the property they sell, are too slow in contacting sellers and arranging viewings, and on top, vehiculate own biased oppinions about other properties. For many, their "professionalism" equates with writing an offer and bringing it to legal office. You can operate all communication gadgets of modern technology, you can write it yourself. Very few agents are real proffessionals and a delight for both seller and buyer, to deal with them. To those, my hat down!
    Unfortunatelly, there are only a few (less than the number of fingers of a hand) professional realtors in each real estate agency. The rest are "in training" and remain there, for the rest of their life. They make money based on the idea that a property "sells itself" and if not, their "professional" advice is for you to lower the price. Do they lower their fees on the same percentage as you are asked to lower the price?? They don't work hard to put your house in showing condition, but you do. They don't even bother to swip a pet "accident" if the owner or tenant did not do it before the realtor openned the house for buyers to see it. And a few steps away in this house he advertised it as "a picture home", you find your foot sinking through the hole of the floor... Wake up people! Don't throw your thousands to someone who opens your house once. You can sell your property with much determination, cnowledge and consideration for the buyers. Good luck! nooo, better, have curage!
  • Tatiana Tsipis | 09 Aug 2012, 10:57 PM Agree 0
    Always shop around and ask your friends if they recomend a good realtor to you
  • Curtis | 09 Aug 2012, 11:32 PM Agree 0
    Realtors who (with a straight face) compare themselves to doctors and dentists lack the self awareness needed to ever give this industry the credibility it desperately craves. You can be a good one and a fair one, it doesn't need to be a choice.
  • easyrealty | 10 Aug 2012, 01:54 AM Agree 0
    Whatever you are drinking I will have two.
    This is idiotic. Didn't the collapse of 1% Realty teach you anything?
    Why would I bring my buyer to a discounted $2500 commission when the next 10 ( homes offer $10,000.
    Where do these guys get people to invest in this idiocy?

    As long as anything you are doing is tied to the old MLS (Monopoly Listing Service) small investors will not catch a break.
  • Easy | 10 Aug 2012, 08:01 AM Agree 0
    Chee whiz. My feelings are hurt.
    I am a cheap and good Realtor doing 270 listings and sales since 2007 from my computer.
    No team, no support, For example I just listed a home on Vancouver Island from my laptop in Surrey and it sold in 5 days in a "down" market.
    ..and I never physically saw the property. I just e-mail the forms and the seller fills them in and e-mails them back with pictures.
    Offers come in by e-mail etc. etc. One Sunday I sold a home 600 kilometers away in Cranbrook B C another in Delta B C and another in Comox on Vancouver Island. Never left my laptop.

    Any Realtor can offer this service but would rather pretend it's still 1955 so they can charge more.

    The previous comments are true as CREA forecast Real Estate will be done by 2021.
  • A Friendly Realtor | 10 Aug 2012, 03:37 PM Agree 0
    This website must have the backing of the lawyers. The amount of potential ligitations that will come from this will be large.

    Have an realtor who does business based on a low service fee equates to having an unprofessional paid escort sell your home. WHY? If an agent bases their income by lowing their fee to virtually nothing (and you may think 1/2% to 1% is a lot of money, however, with todays cost of doing business along with living expenses, for most realtors, they would have made more money flipping hamburgers), you will only attract that quality of agent who knows very little about real estate. Hence, the frusteration and lawyer issues mentioned above.

    I agree, being a professional Realtor for almost 20 years, that many agents with years of experience still shock and surprise me from their lack of knowledge in their own industry. And Sellers and Buyers should qualify their choice of agents prior to hiring them. Just because an agent has several signs in an area; because you have a family member who is in real estate; good fast talker or pressures you into doing business; or is an agent referral, it is your right to hire the most professional for YOU!!! And they should be paid respectfully.

    This type of web referrals/bid system will only bring down the reputation of realtors. From reading many posts and comments, many people already don't hold realtors in high reguard..

    We will survive. The cream will always rise to the top. Unfortunately, as the less quality agents leave the business, the real estate schools are filled with new recruits so the mix remains the same.
  • Randy Peppercorn | 10 Aug 2012, 07:27 PM Agree 0
    Welcome this change and welcome further changes in this direction. For the realtors, it represents a chance to clean up the industry and offer real value. For the economy as a whole, as legacy rates of commission are replaced by competitive rates, the total economic wastage will be reduced and money will go to more productive uses.

    It is important to recognize how out of balance standard commission rates are. The search and discovery process of buying and selling houses has been hugely facilitated by the internet. The market analysis that realtors offer their consumers is so basic, so painfully simplistic that it can be taught in half a day. In Toronto, to sell a condo or a house you're obliged to offer a commission that is equivalent to an entire year's salary of a hard working teacher. Now compare the value of the realtor and the teacher for the sale of the house. And it's not like you're effectively paying for years of education and accreditation in order to professionalize the realtor. This isn't law or medicine or even, god forbid, finance. In fact, this isn't education. To teach kindergarten you would have to go through more rigorous training. This is selling houses.

    And to be perfectly honest, if realtors were outlawed and the mls was left standing, all of these houses would sell. People would draw on their family and friends. Builders and housing inspectors would play a larger role. Lawyers would play a larger role. Transaction costs would be significantly lower, buyers and sellers might be more proactive themselves and might outsource tasks like showing a house. But even then, what should be the cost of having someone show your house? Maybe $100 an hour at the most? And what about all the questions people would ask, you need a highly trained professional there right?

    Has anyone been house hunting lately? More often then not there's a different agent from the same brokerage showing the house. They can't answer any questions. Why are they there? To hand you their card and seek your business.

    At present, the industry exists for itself as a tax on its customers. When competition is properly introduced, hopefully, the industry will exist because it will represent true value. This will be at a much reduced rate and hopefully an improved service.
  • DB | 10 Aug 2012, 11:33 PM Agree 0
    Great. It's so simple and we make a ton of money.
    So why aren't you out here selling real estate?
    If its that simple why not jump in and fill your boots.
    I know you
    *don't like working weekends or evenings,
    *you don't really like meeting people
    *your not very good at negotiating
    *you just don't want to risk being sued because you not sure how to write an enforceable contract
    *you forgot it cost you money to get into the business + monthly fees to belong to organized real estate
    *the reason MLS exists is because realtors share the information to assist other agents and consumers
    *I don't see why you or anyone else should benefit from the work that realtors provide for "FREE"
    *Want to pay less commission, go FSBO - find your own website and see if you can attract, qualify and write enforceable contracts on your own.
    PS: I have missed many a family function, time with my kids because I was taking care of someone who appreciated the service I provided
  • Bored of the Same Ol | 12 Aug 2012, 03:20 AM Agree 0
    Usually, in life it's the same 'ol thing. People who have never walked in the shoes of the person---yet know everything about that person/career.
    Try being a realtor. Then comment on the service fees.
    Trying being self-employed. Then comment on the service fees.

    Continually, I see these websites as a blog/venue for the public to put down realtors. The same 'ol stuff. Why is there such anger towards the profession of a realtor?

    Let's get real. Every single person, in their said career, be it self-employment or otherwise---could be raked over the coals as far as worth for service goes.

    Get a life!

    Do these people (above) click on the next website and put down those career people too? Do these people ( above ) feel really good about what they type?

    Do they click submit comment and say to themselves! Ya! I'm a hero! I know all!

    Very rarely do people, who write about put down others, even know the first thing about their target.

    Or? Be a realtor for 10 years. Then comment.

    If any of the the above people, who comment so lavishly, have not been a realtor? Then? Well? You really don't know what you're talking about.

    Sorry. But that's a fact.
Post a reply