Realtors must lower commission rates to compete: Re/Max Realtor

The two companies didn’t mince words in their press release and media appearances last week, saying that their merger represented a direct challenge to the status quo by offering consumers lower rate services and more choice.

Although many Realtors have lowered their commission rates to attract money-conscious customers, Lee Redwood, a Realtor with Re/Max Garden City Realty in Burlington, Ont., says it’s now more important than ever to make sure that they properly communicate that to consumers.

“It’s really up to Realtors to communicate to consumers,” he told CRE Online. “They can’t sit there at the full commission and think that this isn’t going to change for them. But I think those Realtors in a few years will have a rude awakening.”

Still, that doesn’t mean there won’t be room for high-quality Realtors, making better commission rates, since many buyers prioritize representation over price, he says.

Think of the difference between a high-end and a low-end car buyers, he says. Mercedes customers make their purchase because they “expect a heightened level of service and product,” he says, while Hyundai customers base their decision on primarily on affordability. No one would ever think of comparing a Mercedes to a Hyundai and the same is true for the difference between Realtors and Realtysellers.

“So I think it’s the Realtor’s responsibility right now to say, ‘Hey, guys. We can negotiate too. You don’t have to go to these companies and get less service and representation.’ ”

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