RedDoor: Crowdsourced Sold Data
Download RedDoor from the App Store and join the crowdsourced social movement sweeping the city!!
Free to download. No agenda. Sharing information.
RedDoor believes we are all better off with more information. Watch the video below to learn more, and don't forget to download today. Share with your friends and help us build a database we all benefit from!
Download Today: RedDoor
September 23, 2016 in Buying Toronto Real Estate, Canadian Real Estate Market, For Sale By Owner, Location, location, location, New in New Homes, Pay what you want listings, Real Estate Investments, Save on Comission Fees, Selling Toronto Real Estate, Sold Watch, Toronto MLS Listings, Toronto MLS Sales, Toronto Neighbourhoods, Toronto Real Estate Trends, Toronto Real Estate Update, What's next (in real estate) | Permalink
Competition Bureau acts on MLS fees
Tony Wong's front page article in the Toronto Star:
Canadians in the housing market will pay less in realty commissions and fees if the federal Competition Bureau has its way. In a landmark investigation, the bureau has concluded the Canadian Real Estate Association has anti-competitive rules and must change its ways, according to documents obtained by the Star.
Details of a settlement have yet to be decided, but the bureau's findings are expected to have a profound impact on the real estate industry – by permitting more innovative discount brokers into the market while allowing sellers to list their properties less expensively on the Multiple Listing Service.
With a membership of more than 96,000, Ottawa-based CREA is the largest real estate organization in Canada and represents the majority of the nation's realtors.
"The Bureau is concerned that CREA's rules have restricted consumer choice and limited the scope of alternative business models," says an internal memo by CREA president Dale Ripplinger. "Unfortunately, the Bureau seems to believe that CREA's rules ... create restrictions and barriers."
The bureau launched its investigation in 2007. Consumers have complained in the past about high realty fees and the need for more affordable services. The vendor of an average-priced $400,000 home in Toronto can pay a commission of as much as 5 per cent, or $20,000.
"This is absolute, total vindication," says Lawrence Dale, an owner of now-defunct Realtysellers, a Toronto-based discount broker that closed in 2006. "Once they've reached their settlement it means that the average guy on the street will be able to choose their real estate services and pay less for them."
CREA executives met with the bureau on Oct. 23 to hear the long-anticipated results, according to the letter. "At that meeting the Bureau set out the conclusions of their inquiry and their proposed remedy," says Ripplinger. "The Bureau's position is that if CREA does not remove these restrictions, the Commissioner of Competiton will initiate an application before the Competition Tribunal."
Ripplinger says CREA decided not to go before the tribunal, which can administer penalties, but is pursuing a settlement.
According to Ripplinger, CREA rules the bureau wants changed include those that say the listing realtor must act as the agent of the seller and receive and present all offers to the seller, and property information cannot be posted on the Multiple Listing Service without an agent representing the seller.
Changes to these rules would mean offers could be sent directly to the seller without the involvement of the listing agent. Consumers could likely have their listings posted on the MLS for a small fee.
Dale and partner Stephen Moranis claim they were forced to shut down their company because of rules implemented in 2007 by the realtor's association. Realtysellers offered services such as allowing consumers to post listings for a few hundred dollars on the MLS website, where more than 90 per cent of all home sales are made. The company is suing CREA and the Toronto Real Estate Board.
CREA owns the rights to the MLS.
In a separate lawsuit against TREB, Fraser Beach, another Toronto realtor, alleges the organization terminated his MLS access because he launched a discount brokerage service. A decision by Ontario Superior Court of Ontario Justice David Brown is expected soon.
TREB has argued it didn't block his access to the MLS for competitive reasons, but simply because he did not follow membership rules.
Both CREA and TREB have denied all allegations. A Toronto Real Estate Board spokesperson says the board does not comment on ongoing legal matters. Officials of the Competition Bureau were not available for comment Sunday.
Although the real estate association has agreed to reach a settlement, Ripplinger stressed "CREA does not agree with the Bureau's findings and conclusions, either as a matter of fact or as a matter of law." The association has called an emergency meeting for all member boards in December to discuss rule changes demanded by the Bureau.
Source: Tony Wong in the Toronto Star »
Market conditions impact commissions
Whether they've had to take a cut in their real estate commission percentage rate with the sale of a foreclosed home or saw a decrease in commission dollars per sale due to plummeting prices, many brokers throughout Florida have seen their income drop precipitously with weakened market conditions.
"People are trying to close sales any way they can," said Ellie Trahan, a broker with Golden Rule Real Estate in Ocala. "One of the first things that gets cut is the commission."
With a 25 percent drop in sales activity and an 18 percent drop in the median sales price of single-family homes from 2007 to 2008, Ocala has been one of the hardest-hit areas of the state, according to data released by the Florida Association of Realtors.
To brokers, that means not only a drop in the number of sales they are able to close, but also a drop in the overall level of commissions due to declining home prices. "If you're not making any sales, then 6 percent of nothing is nothing," lamented Trahan.
Discounters becoming respectable
Discount brokerage leads a trend in Toronto real estate
Consumers are leading the way in what some in the real estate industry feel is an inevitable route for the business: cheaper commissions. While other industries, such as travel agents and stock brokerages, have gone the discount route, the real estate industry has largely held steadfast.
Realtors have been successful at holding their commissions at a standard 5 per cent in recent years, although that is already down from 6 per cent a decade or more ago. But in a market where homes are selling in record numbers and at record prices, some consumers are wondering why commissions are still so high in the real estate business.
Prices for homes have also appreciated significantly in the last decade, from $198,000 in 1996 for the average home in Toronto to $365,000 this year, meaning a 1 per cent difference could result in thousands of dollars more in commission.
Meanwhile, the Canadian Competition Bureau, is investigating the Canadian Real Estate Association to see if the CREA's guidelines discourage discount brokerage houses from using the Multiple Listing Service (MLS), which the association owns. CREA officials say they are simply protecting their trademark.
The MLS, a computerized database of available homes, is used for 90 per cent of residential real estate sales in Canada.
Reducing the Commission Fees
Most real estate agents still want a 5 percent commission. But a few clever brokers have figured out how to sell homes cheaper, by setting up VOW's (Virtual Office Websites).
If you're selling your house, a discounter can save you a ton of money. These brokers offer all the usual services and expertise. But instead of charging you 5% of the sales price, they take 4% or even 3%. You save $3,500 to $7,000 on a $350,000 house—a no-brainer she says ...