for saleYears ago, when our industry was managed by the provincial ministry, I was broker of record of my own company and I contemplated starting my own real estate for sale by owner (FSBO) website.

I quickly realized when developing my marketing strategies for that website that I may be in conflict with real estate rules and regulations, so I decided not to go ahead with the site. Years later, with popularity of the Internet, FSBO websites thrive. They are cheered by the public, they win professional marketing awards, they win provincial business awards, they sell franchises and in the latest marketing gimmick, they “associate” themselves with Realtors who “help” put properties on MLS.

I have examined a couple of popular websites that market in Ontario, I also looked at the “association” they have with “real” Realtors. And as a Realtor, I find some of the things they say and do unsettling.

Consider this: Instead of this huge website offering the help of a Realtor, think the other way – A Realtor hiring a FSBO website company to assist the Realtor to get business. That makes the FSBO company an unlicensed assistant, does it not?

So, if the FSBO website is acting as unlicensed assistant, procuring listings for a Realtor to put on MLS, how can this be allowed?

Here are some issues and concerns that I found on some FSBO websites.

Site “A”: 1. When a property is sold privately, the company puts a sold sign on the property, giving the impression that they sold the property and not the seller privately, thus misleading the public to think that they are a real estate company.

2. The website states that Realtors charge “usually five per cent or six per cent commissions” and says, “Paying five per cent or six per cent of the sale price is traditional for real estate agents.”  I held senior positions in several real estate companies in the GTA and had access to thousands of listing agreements, and I can tell you, this is not the case. Again, the site is misleading the public and scaring them off Realtors.

3. They claim on the site that they “Teach people how to sell their home” and that they are “local experts”. What credentials and education do they have to make these claims?

4. Quote from a website: “If saving money makes you sick to your stomach, we’d recommend an agent.” This is slanderous and is not tolerated in our profession, but apparently it is okay when you are dealing in real estate without a license. By the way, this company is now proud to claim that they are “associated” with “agents”.

5. As part of their assistance they state:  “Sellers will price their home similar to others…” This will be done (I am assuming) with the assistance of their “experts”. Clearly a badly executed C.M.A (no “solds” to compare) done by non-professional, unauthorized people.

6. “We can help you get on realtor.ca”. It’s clear to me that this is solicitation to list properties to sell – not allowed by non-licensed individuals or companies.

7.  The site uses expressions like “relisting costs” and “sale consultation”, giving the public the impression they are dealing with a “legitimate” licensed Realtor.

Site “B”: 1. The site claims they offer “ALL the tools and professional assistance you need to sell your home.” Really? Do they even know what all the tools are? Do they know the difference between professional assistance, which is based on a lot of education, and amateur limited knowledge and limited resources from non-licensed help?

2. They will (according to them) also provide: Ongoing support to take you through the sales process.” They will also provide “the complete set of tools to determine the right price.” 

3. They claim they have 235 “sales representatives”. Are any of them licensed? Are any of them authorized and educated to help determine the right price (market value)? Is the public not being misled when they see “sales representative” beside a name, giving the impression they are dealing with a Realtor?

4. In a paragraph titled “Why choose us”, this website is bragging that so many thousands of homes are “sold through us”. Is this not trading in real estate without a license?  What if a licensed Realtor put out a statement like that if his license expired for just one day? How long before the provincial regulator issues a warning to this person about the consequences of dealing in real estate without a license?

5. A mention is made to an “association” with a “real” Realtor and that for an extra fee, your listing will appear on MLS. I have gone on this website asking for information about selling my house with the “help” of a Realtor. I found out the Realtor is in Ottawa (I live in the GTA). I did not take it any further.

Will that Realtor come to Toronto to meet sellers and  “I.D” them? View the house? Measure the house? Ask the sellers pertinent questions? Check for visible deficiencies?

My guess is no.

Is this the spirit and the intent of the due diligence laws and of provincial regulations in regards to listing a property? Am I missing something here? Have the rules changed?

Michel Friedman
Michel Friedman

Or does our real estate license not mean anything anymore to our licensing authorities?

Is the public only being protected from us (licensed Realtors)?  If you are not licensed, you are free to make the claims above? Help me out here!

Michel Friedman

Broker of Record

Orange Square Realty

Toronto

145 COMMENTS

  1. Thanks – I am from Ontario, and learned from Merv’s class that showing up with an offer is not an entitlement. He was a great speaker and educator. The RECO ethics case where the registrant paid a $10,000 penalty for trying that is not online any longer, but their help desk can explain it too you.

    The word “accept” in the clause you quote is very clear. The offer must be ACCEPTED, not just slapped down on the table.

    Refusing to close on an accepted deal is another matter, and each case would have it own merits.

    If showing up with a full price offer was instant commission, the agents that underlist to create a bidding war could retire, early.

    • Richard:

      Your concentration on the word “ACCEPT” is an ‘either-or’ proposition.

      Either commission is to be paid upon delivery of an offer meeting ALL pre set conditions, ACCEPTED or not by the seller, i,e,; price, closing date etc., “OR”, (this then is a separate case, different from the preceeding case), upon ACCEPTING newly ‘created’ differing conditions by the buyer after the fact of ‘considering’ said differing conditions, that thereafter may be ACCEPTABLE to the seller upon due consideration by the seller of those new differing conditions from the original norms/conditions as set out originally within the listing. You are comparing apples and oranges separated by the word “OR” my friend, in my opinion.

      The first instance, being the description of pre set events/conditions/requirements preceding the word “OR”, invokes a requirement to pay commission…period.

      The second instance, following the word “OR”, gives the seller the ‘option’ to accept, or NOT, new/differing conditions from the original/pre set conditions, and only upon ACCEPTANCE by the seller of the new/differing conditions following the word “OR” is a commission payable…period.

      There is no ‘option’ for the seller to consider re conditions in the first instance of that two-pronged sentence. The seller does not have to ACCEPT the offer in this first case preceding the word”OR” to be liable for payment of commission…period.

      It’s an either/OR scenario.

      • The guy that sent an invoice making such a claim, paid $10,000 to RECO, plus the legal fees to defend the claim.

        Call OREA – they wrote it and can explain it in even more detail.

        Since all the agreements are with the brokerage, find one that has succeeded, and let us know. Court cases are online now, please show us.

        • Richard:

          Before I go plowing through court cases in pursuit of decisions, here is Merv Burgard’s response to a query relating to this issue.

          Question:

          “Can a seller avoid paying commission by refusing to sell his house after an offer was submitted meeting all terms and price? I would think the wording on the listing contract would be important to release the seller from any obligation.”

          Answer:

          Merv says…

          “You are correct that the courts will review the language in the Listing contract and the related documents. One major consideration is the reasonable expectation of the parties and whether you advised the sellers that they could be liable if they refused to accept an Offer. A second issue would be whether the Offer was exactly on the terms of the Listing and Data Input sheet as to conditions, the closing or possession date and any other matters.”

          The implication by way of Merv’s comments is clear; the listing contract is just that, a contract, which is enforceable at law if it meets a judge’s test regarding proper wording etc.

          I spoke with my former Broker of Record (I am now retired from ORE/Century 21 United Realty Inc., Peterborough, Ontario) who agrees with my, Ross’s et al position on this issue.

  2. Mr Martindale is totally wrong in his assertion that a full price firm offer earns a commission. Nowhere in the listing agreement does it state that, and no court has upheld that fanciful claim.

    Accepted offer, and successful closing, are needed to earn an MLS commission.

    RECO or his broker-of-record can explain the concept.

    • Hi Richard,

      If an Offer is obtained that is able to meet all the terms contained in the listing agreement any remuneration schedule (let’s get off the commission kick as it is 2013) must be honored.

      In the case of most MLS listing contracts this means if a listing asks for $599999.00 and has a complete list of inclusions and exclusions and further has a distinct date of closing, any offer that is legally viable that meets all these criteria exactly, means the terms of the contract has been fulfilled any remuneration is now payable.

      I am sorry but this is a fact and personally I have been paid on two such contracts in my 25 year career.

      Once the seller refused to close on a duly agreed upon deal. I was paid within 2 weeks and the buyer (represented by another agent) decided not sue because they think was 1992 and he had found a better value he wanted to buy,was my understanding.
      In the 2nd case my seller refused a full price offer meeting all terms for some strange reason. It was later discovered the buyer returned later and the seller made a private deal on the same terms. This one was quicker as I was paid within 48hours of my phone call to his lawyer.

      Now a seller never has to sell his home if a full price offer is presented (assuming all other terms met) but remuneration to any contract must be honored.

      One more point. During 1990 to 1995 as prices were declining and the false belief that buyers would only lose their deposit for failing to close were met with the reality that even if the seller did not want to sue the agents would. In my experience this forced many a close and saved many of my sellers from financial hardship.

    • Richard:

      Ross Kay beat me to the punch. Thank you Ross for your explanation.

      Perhaps you are not from Ontario Richard.

      Provided that the Listing agent, prior to signing a Listing, has advised the seller that commission must be paid if said seller refuses a full price offer without any supplanted conditions and otherwise fulfilling all other noted conditions within the Listing (date of closing etc., as Ross has explained above), a Listing Agreement is a legally enforceable document in Ontario.

      OREA Listing Agreement (Form 200) states: “In consideration of your listing the Property, I agree to pay the Listing Broker a commission of …. for any valid offer to purchase or lease the Property from any source whatsoever obtained during the Listing Period and on the terms and conditions set out in this Agreement OR such other terms and conditions as I may accept.” (copied word for word)

      A listing Agreement is NOT a contact to sell a property; it is a contract to pay commission upon completion of the contract, being, the deliverance of a full price offer sans any conditions or changes to the listing requirements for said sale…period.

      Realtors sue for breach of contract re unpaid seller commissions based upon Listing Agreement wordings and prevail all the time, ‘else, what’s the point of the Listing Agreement at all?

      It is up to a judge to decide if the wording within a Listing meets the test of an enforceable binding legal document upon submission of a Realtor’s/plaintiff’s claim for damages (commission) due to breach of contract on the part of the defendant/seller.

      • Ross K, Brian,

        Just want to throw a couple questions your way.

        What constitutes ‘a valid offer’ in the context of the Listing Agreement’s definition found before the compensation agreement?

        and

        if you’re correct, what would be brokerage’s protection against a counter-suit for fraudulent misrepresentation in the instances where the list price on the advice of the Realtor was specifically set low in order to cause a bidding war but no offer exceeding the list price materialized?

        • Hi PED:

          Re your first question:

          I believe that it would be up to a judge to decide what constitutes a “valid offer” by way of examining the wording of a Listing Agreement. Not all suits are successful based upon iffy wordings. There is a case that Merv Burgard referred to that outlines just such a case in the December 2006 issue of REALTOR Edge, Merv’s column: Full price not the full story:
          Bird vs Ireland, 2005 CanLII 44382 (ON S,C.D.C)

          Re your second question:

          I believe that if a seller agreed to what he/she believed to be a below- market-value list price on the listing that said seller would have knowingly taken the chance to gamble for a hoped-for bidding war. The Realtor would have had to have advised the seller that that would be a strategy going in. The seller would have the option at any time to increase the listing price if no suitable offers emerged. If a full price non conditional offer emerged quickly after signing of the low ball listing it would look very suspicious if the selling agent sued for commission in my opinion, and I believe that a judge would take that potential manipulation into consideration, and thus throw the suit out. I’m not sure that a buyer agent delivering a full price non conditional offer could do an end run around the listing agent and sue directly if said agent brought the offer and the listing agent did not sue for commision in the first place. The contract is with the listing agent only.

          Tricky business n’est pas?

          Regards,

          Brian

        • RE: Under Valued Listings to Generate Offers.

          PED you have outlined another dangerous areas Agents get themselves into. I agree with Brian that the listing agent of an undervalued property would lose in court but…
          What about the Buyer who in Good Faith, writes an full price offer on the exact terms included in the listing and NO OTHER OFFER appears? Well in this case I suspect based on recent court rulings the seller opens themselves up for a “Specific Performance” loss in court.

          As Professionals, is an Agent under the fiduciary duty of Agency really allowed to under price a listing without having the Listing Agreement altered to specifically address any undervaluing?

          Now this is where OREA and CREA could assist members by getting a legal opinion and legal recommended direction for their members.

          • Hi Ross:

            Re your “Specific Performance” scenario.

            Would not the buyer’s claim for Specific performance only be valid if the seller accepted the offer in writing, and thereafter gave notice of refusal to close?

            I believe that if a seller received a full price, non conditional offer on an obviously underpriced listing with the listing price knowingly being set to attract a bidding war, the seller may refuse to entertain the offer in the first place and just let it die a natural death without negative legal repurcussions/opening up a path for a lawsuit. I don’t believe that the courts would force any seller to accept any offer to sell.

            I believe that a seller can pick and choose who he/she wants to sell his/her property to, for whatever amount, be it at full price et al or not.

            What say you?

            Brian

          • Ross if the agent altered the listing agreement to specifically address that they are undervaluing the property to attract offers would this not be a “bait and switch” scheme?

          • Thanks for your answers fellas. I think these underline just how tricky some of the agreements we make can be and how individually we may not all be on the same page in our understanding. For example:

            In the case of suing for the fees after an offer that is in agreement with the listing comes in, I don’t believe it’s that simple unless the listing agreement is succint and clear as to what constitutes the valid offer coupled with the seller’s stated intentions.

            Something as simple as the possession date on the offer being different to that noted in the listingor even negotiable means the offer is not exact and I wonder how many Realtors do not include the brokerage’s schedule B as a schedule to the listing agreement such that when that is attached to the offer it too is not in agreement with the listing. And of course requirements to warrant or conditions are also not contemplated on the listing and so are outside of same. How about deposits? would the seller be bound to accept an offer made to listing terms by a company yet to be incorporated?

            Ross, I also don’t believe that the buyer who makes an offer to match the terms of the listing would have grounds for specific performance since the seller’s listing is considered an invitation to treat – an old axiom that is given force because the seller is not specifically targeting anyone.

            But you’re correct, these may be topical matters that OREA should endeavour to make clear to registrants especially now that the continuing education requirements may now fall squarely in their hands if they are RECO’s proxy provider.

            We could ask Merv to comment but he generally stays away from doing so in here, perhaps the answers already are found in his legal forum. I’ll look later.

  3. I was recently perusing the “Open Door Realty Inc., Brokerage (MY CONDO LISTING) sell commission free on MLS” website wherein it proclaims “List and sell your condo WITHOUT a Real Estate Agent”. (copied word for word)

    Further down it offers “…and select a-la-carte help from licensed REALTORS…”. (copied word for word)

    It offers a $399. special, a $599. medium package, or the $999. “best value” package.

    The small print at the bottom states:

    “All properties listed through Open Door Realty Inc., Brokerage are listed on the TREB Multiple Listing Service.” (copied word for word)

    “MLS, REALTOR and REALTORS are a trademarks of the Canadian Real Estate Association (CREA). Open Door Realty Inc., Brokerage is a member of CREA and is granted use of their trademarks.” (copied word for word)

    “..are ‘a’ trademarks…”? They can’t even speak English properly, nor catch and correct the error prior to publication.

    This is how your 100,000 members’ enforced dues are being put to the ‘best use?’ in pursuit of your business interests.

    Somehow, CREA believes that undermining its traditional paying members’ interests, with their own monies, is the way to politically correctly accommodate others’ interests.

    Seems like the act of a self-serving traitorous (QUIZLING) organization to me.

    • FYI: The brokerage who owns these sites is in complete violation of several requirements of RECO and the CREA code of Ethics.

      Another site they own, LetMeList.ca is also in breach.

  4. Dear homeowner:

    The philosophical debate regarding who actually pays the real estate commission, seller or buyer, has raged for years. My position is thus:

    The buyer actually pays due to the fact that the commission is in fact deducted from the purchase price.

    The seller knows full well how much net will be received when accepting an offer to purchase. The seller may negotiate a commission reduction with the selling agent re his/her commission in order to facilitate a sale. The buyer receives what is stipulated on the MLS contract. The seller agent cannot unilaterally reduce the buyer agent’s commission as per his/her own reduction. Thus, in reality, all philosophical ruminations aside, the buyer agent is paying the commission up front. His/her purchase money transfers to the seller’s lawyer in the first place, to thereafter be distributed to the parties to the transaction. The purchaser’s monies only become the property of the seller upon transfer of the deed. Then the monies are divied up re commissions, making it appear that the seller is paying the total commission. Appearances are often deceiving to the superficial thinkers of this world. Legal bafflegab also confuses the issue.

    The truth is this: No purchaser bucks; no commissions, no how, no way.

    However, if a full price offer with no conditions is received by the seller, and the seller decides not to sell after all, then that seller is penalized for breach of contract and must pay the full commission, not for the completed sale, but for unlawful breach. A penalty is not a sales commission, it is a penalty for breaking a trust. Thus, the buyer agent gets his/her due rewards, as stipulated by law, without the benefit of a closing taking place. Thus the buyer agent gets paid by the buyer’s up front purchase price funds pre-designated as commission.

    What is it that you understand as fiduciary duty?

    Your first obvious failure as an attacker of me is your absolute lack of honesty. You hide behind mommy’s cloak of invisibility.

    Why? What are you afraid of? Will your reputation be tarnished? Do you have a reputation worth tarnishing at all? Do you not want others to actually know what you think because you speak with a forked tongue in the presence of those who know you?

    Grow some balls.

    • Of course I “hide behind mommy’s cloak of invisibility” as you so (in)elegantly put it – my experience on this website is that any dissenting voice is promptly stomped on. Who wants to be publicly bullied?

      You’ve noticed I have a bee in my bonnet about how commissions are paid, how realtors don’t pay attention to how the market place is changing and how they need to see the new realities. My experience is that many who comment on this website (some of whom also hide behind their mommy’s cloaks of invisibility, by the way) seem not to be interested in a consumer point of view, yet I represent that new reality. Consumers are asking more questions, finding information in new places and don’t accept the status quo. Instead of paying attention, you loudly and with insults keep trying to prove why you are right. You seem less interested in having a civil debate than informing me – and others with similar opinions to mine – just how wrong and uninformed we are.

      So I prefer to be known as “Homeowner”.

      As for the rest of your questions, you can think what you like – I’m not interested in responding because I don’t think that any of it really matters to you. Just know that you are giving up the chance to have a reasoned and interesting debate with someone who can give you the other side of the story – the consumer side of the story.

      Don’t think I’m put off by all of this – I still enjoy reading REMonline and will continue to see what’s new in the world of real estate and what’s the “same old same old” in the comments section.

      • My Dear Homeowner:

        You are not being bullied. Being bullied implies being tormented by someone stronger, or, to be hectored with threats. Are you saying that you accept that I am intellectually stronger than you and/or educationally stronger than you on this subject? No? Then you are not being bullied my friend. You are simply being effectively rebutted.

        You seem to forget that I too am a consumer. At 65 plus years of age I likely have been a consumer for a longer period than have you. Therefore, because I have been on both sides of the fence, unlike you, I believe that I own a much clearer picture of the realities of consumer-Realtor interactions than do you. Before becoming a Realtor I dealt with Realtors as a buyer-seller client numerous times, not always in a satisfactory manner from my standpoint by the way.

        Until you have walked in another’s shoes for a mile, you have no real understanding about that which you complain about. You simply parrot what others of your ilk say, or you have had a bad experience with an unsavory Realtor, of which there are too many on the loose. You throw the baby out with the bathwater.

        I don’t know what you do for a living, but whatever it is, if I have no experience within that venue, I don’t believe that I have any legitimate business telling others about what I perceive to be the weaknesses of your vocation where it concerns the public interest. I would be speculating. Speculation is an iffy game at best.

        You won’t be the first person to run away from these debates because you feel intimidated, or overwhelmed, or bullied, as you describe it, even though your reputation is protected by anonymity. I would have thought that anonymity would embolden one to take on a known personage. There is no real penalty for you to be paid re public condemnation, which is the risk that I run.

        That is why I discount your opinions; you put nothing on the line my friend; you simply throw mud willy-nilly at a known personage from behind a protective barrier.

        You risk nothing. Thus your opinions have no real value attached thereto.

        I give up nothing when I ‘supposedly’ drive you off this site.

        You simply are in retreat.

  5. I agree fully with the article. If a person does not have a license, they are not allowed to advise re real estate transactions or be paid in connection with real estate transactions or else it is considered “trading in real estate” in fact a front desk person at the office is not allowed to answer simple questions like “what is the price of 123 main st” or “how many bathrooms does 123 main st have”. These calls must be answered by a salesperson or broker. The FSBO companies are 100% for sure, “trading in real estate” every time they take a call from their clients and answer their questions. Having met owners of a franchise of this sort, I know for sure this is true.
    Carol Day Peterborough On

  6. In all of this my question is: Since FSBO companies are taking on the roles of REALTORS…………who is the Broker of Record?

  7. Something that I find troubling are salespeople and specifically broker/owners who undermine the value delivered by realtors. I just came across a new company that just launched in December and on their website, they state, “A seller will not pay the listing side of the commission”. The principals claim to be experienced and management from traditional brokers, but what message are they sending the consumer and the industry. We need to stop giving away the pie or there will not be pie left. Let’s stop the race to the bottom of the barrel….we deliver value and should be paid for our services.

    • “We deliver value and should be paid for our services.” You are right – but you should be paid by your client, and not depend on the old school “vendor pays for everything” model that consumers – rightly – find offensive.

      As long as your commission is based on the selling price of a property and you expect the seller to pony up for everyone’s commission, you are a commissioned salesperson and nothing more. Once you start properly charging for your services according to the services you perform, then you come closer to being the professional you want to be. Once you start charging your client for your services, you come closer to being the professional you want to be.

      Hard Working REALTOR has it right – pay attention to what consumers are saying. Consumers have a lot of information at their fingertips and – sorry – they can successfully buy and sell their own houses without the services of a real estate salesperson. Pretending all those deals fall apart is just ignoring the facts. And remember – even deals put together by real estate salespeople fall apart.

      If you want to be relevant and keep your jobs, you need to find what consumers need and want and then fill that niche. Things change. Get over it and get on with it.

      • FYI: One of the BIGGEST Problems is….

        In Ontario Licensed RE Professionals who fall under RECO are LEGALLY PREVENTED from charging a FEE based on performance. (IE Only receive commission on an amount in excess of a minimum set price.)

        Sellers Agents if acting as RE Professionals CANNOT charge 1% on the first $500,000 and 20% on anything above. Instead Agents are forced by law to ONLY BE ALLOWED to reduce the commission as the price increases.
        So a Sellers Agents CANNOT be legally financially rewarded for obtaining RECORD PRICES for Sellers.

        Buyers Agents are PREVENTED from being financially rewarded from getting their Buyers a lower price in Ontario because again RECO does not allow remuneration based on an increasing grid.
        So a Buyers Agent who finds an underpriced home and then Negotiates his Buyer a price $20,000 under the appraised value cannot be paid $1000 on the first $500,000 of negotiated price and then 1/2 of whatever they negotiate under the appraised value (in this case $10,000)

        I believe this is the real topic the Competition Bureau should have looked into and one OREA and CREA itself should be addressing as the professions voice with government. I know most professional highly skilled Agents would prefer to be paid a base fee up front and then a substantial bonus when they get above average results.

        In over 300 transactions under Buyer Agency Contracts I have reviewed not a single Buyer claimed to want their agent to be rewarded for negotiating a higher price.

        • Ross you have every angle well thought out don’t you. The REAL problem is any Board or Regulator getting involved in any way, shape or form the manner in which we charge for our services. That means the pillar of remuneration should be completely removed. That means any REALTOR working with a buyer would have to negotiate their fees and bonuses based on service and performance. And if our negotiating skills are as many claim here then this shouldn’t be an issue.

          That would also mean agents aren’t put in the position of prejudicing a home based on commissions offered. And it wouldn’t put industry members in a position where they might have to compromise their personal and professional ethics.

          There’s good regulation and bad. Regulation that restricts us from doing our jobs ethically or alienates consumers is bad pure and simple.

          • The pillar of remuneration was effectively removed back in 1995 on the first day Buyer Agency became a legal option in Ontario. The Inclusion of a simple statement in the Agents Comments section of any MLS listing solved the problem.
            ” The Seller instructs the LISTING Brokerage to solicit any and all offers on the subject property, from any Purchaser represented under a duly authorized BUYER REPRESENTATION Agreement (EXCLUSIVE OF DUAL AGENCY) and the Seller further hereby Agrees to include in the final negotiated selling price an amount equal to the Buyers obligations contained in such Buyer Representation Agreement.”

            A simple instruction clause contained in the offer further identifies how Commissions are to be paid by indentifying amounts to be withheld as part of the adjustments calculations, to ensure the Buyer Brokerage Fees are paid out in accordance with the legal obligations of Agency.

            Currently this is the only way a Seller can ensure their home is viewed by the widest range of Buyers because many buyers cannot afford to buy a home and then pay the buyer brokerage fees out of pocket. They need it included in the sale price which currently excludes 10’s of thousands of properties across the country.

        • You think commissions should be based on your ability to get the highest/lowest price for your client. You are not thinking like a homeowner. A homeowner is expecting you to use your experience, knowledge and skills to sell their house. Homeowners do not link the value of their property to the service you perform or the amount you should receive for successfully selling their property.

          One of the more attractive aspects of some of the newer brokerages who offer a range of “a la carte” services is that homeowners pay only for the services they want. It isn’t the “one size fits all” commission charged traditionally – i.e. a percentage of the selling price. Sellers can get quality service tailored to what they need or want.

          Linking your commission to the selling price is how you would like to be paid. That was fine back in the days when you controlled how consumers got their information and you controlled how things had to happen. That horse has fled the barn and now homeowners no longer need you or your old, controlling ways. They need someone to advise them and do for them the things they don’t know how to do – and those services should have fees attached to them. Fees are not a percentage of a selling price – why would you get paid more helping a homeowner sell a $300,000 home than a $250,000 home – have you provided more services to sell that $300,000 home? Do you provide the homeowner with the $200,000 home with fewer services, seeing as you get paid less? Since when does your time get remunerated on sliding scale that has nothing to do with the time and effort you put into it? Oh right – a commissioned salesperson gets paid that way, not a professional.

          Get with the program, folks.

          • Homeowner:

            Re your opening statements:

            “You think commissions should be based on your ability to get the highest/lowest price for your client. You are not thinking like a homeowner.”

            Really now. Seriously?

            What do you think my buyer clients thought then when I tell you that they could not afford anything more than $200,000. (Peterborough, Ontario region), that they had their eyes on a property listed at $242,900, and that over a period of a week, I negotiated a purchase for them on that particular subject property for $193,000. What value was I to those folks? I was able to do this due to my “ability” to ferret out information about the subject property through channels not readily available to private buyers/sellers/FSBO outfits etc. This “ability” is known as “research skills”, and the subsequent “ability” to put the information gleaned to good use, for “my” clients only.

            Do you understand the concept of fiduciary duty?

            How much do you think I was worth to these clients as their fiduciary?

            Don’t believe me?

            Email me with your quesrions and I will provide names and addresses.

            [email protected]

            “Negotiation strategy” was my specialty.

            It is worth plenty Homeowner, or whomever you claim to be.

            Fess up with your true identity why don’t you.

            Anonymous know-it-alls count for nothing in my book.

          • Dear Brian Martindale.

            I was wondering when you’d chime in.

            Actually, I do think that in the example you gave, you were of great benefit to your clients. You did your job and you did it well, and i’m sure your buyers appreciated everything you did for them.

            So, how did you charge them? Or did you take your commission from the seller?

            You missed my point entirely. My point was that if you want to be considered a professional, you should be charging your client a fee for your service.and that fee should have nothing to do with the final purchase/selling price of the property.

            To answer your question about whether I know anything about fiduciary duties, the answer is yes, i do. I actually know a fair bit about fiduciary duty.

            Re your comment about sending my questions to you, I hope I don’t disappoint you when i say I don’t have any questions for you.

            Finally, it doesn’t really bother me that “anonymous know-it-alls [like me, I assume] don’t count for anything” in your book. Brian Martindale, I have no interest in being in your book.

      • It is unfair that us agents need to “pony” up so to speak to ensure we are up to date on policy and procedural changes let alone “pony” up for our professional license and memberships. Our license by the way is issued by the department of Justice.

        It is unfair that some “Joe Blow”can call themselves a professional and not have half the knowledge or experience that is required to be to become a licensed agent.

        You’re right times have changed and we now have the tools such as a buyer agency agreement whereas the vendor does not necessarily have to foot all the bill. With that being said, there are coutless lawsuits and statistics out there that clearly state there is really no protection for the vendor or purchaser if they do it on their own.

        As agents we are trained to ask the right questions and uncover specific details. We are educated on by-laws, zoning, condo acts etc.

        Anyone can be a “salesperson” but not just anyone can be a REALTOR®.

        Would you let your mechanic diagnose your child with an illness or vice versa would you let your doctor tell you what is wrong with your car?

        These people have specific qualifications for their trade or profession just like we have specific qualifications and education requirements for becoming and maintain our titles as REALTOR®.

        A lot of FSBO companies out there portray themselves as experts, licensed agents when in fact that is not the case. They are simply a MARKETING firm.

        I don’t have an issue with the competition that FSBO brings. What I do have an issue with is because I am a REALTOR® I am held to very high standards by my governing bodies. I have a REALTOR® code that I must follow. I have fiduciary responsibilites to my clients and I practice real estate with the utmost regards. My so called “counterparts” or FSBO companies can do and say as they please. They have no governing body and no recourse should their actions put the homeowners in a situation.

        Don’t pretend to be someone you are not. Let me do my job and I’ll let you do yours.

        Food for thought….

        • I agree with you, REALTOR. You have particular skills which are valuable to people who are buying and selling real estate. I think they are valuable skills and you should be properly compensated for using them to help buyers and sellers who choose to use your services. Just don’t say that those skills are worth so much more because a property sold for more than the house next door – the value of your service should not move up and down because one person’s house sold for more than the one down the street. Fees for service relate to the service you supply, not to the value of your customer’s property.

          And I actually agree that FSBO companies should, if they are actually providing more than a marketing service, be licensed by their provincial licensing bodies. Your beef should be your licensing body, not those companies who are walking the line between licensed and not licensed, or consumers who are seeing a wide range of options available for selling their homes.

          By the way, paying your licensing fees and for keeping up to date on policy and procedures should never be considered “ponying up” – that is part of what makes your service valuable and is the cost of doing business.

          And can we please stop using the analogies of “would I go to my mechanic to diagnose my kid’s illness” or “would I go to my dentist to have a broken bone set”. A more appropriate comparison would be that I could go to Midas or Canadian Tire to have my oil changed and my tire pressure checked, or I could do it myself. I could use the services of a real estate salesperson or I could do it myself. The choice is mine. In the car analogy, doing it myself means I have to go out and buy what I need, take the time to drain the oil, etc., and hope that I’ve remembered to put the plug back in. Letting the professionals do it means I can drop off my car, walk away and know or at least expect it’s been done properly. Doing it myself can bring a satisfactory result; so can using Canadian Tire.

          And so it is with real estate now. As a homeowner, I can do everything myself – advertise my property, hold open houses, call my lawyer, call a home inspector to see what I need to fix up, call in a staging person (all three of which will charge me a set amount for their services, by the way), and so on. Or I can call in a REALTOR to do it for me. Both ways can result in a successful sale. It’s just whether I want to spend the time to do it myself.

          • The issue isn’t about someone deciding to sell their home privately. You’re free to do this just as you are free to fix your own car, take it to Canadian Tire or to the dealer.

            The right to sell privately was not the subject of this article nor any others throughout remonline but the unfortunate thing is that fsbo providers and consumers like yourself – probably for defensive reasons – prefer to turn it into a fee debate.

            REALTORS and fsbo providers have no more right to tell you the consumer that the competition’s fees should be limited or even suggest a stated value, that’s called price fixing.

            Likewise you have no right to dictate fee structure to any service provider or an industry as a whole or the manner by which they should calculate their compensation.

            Your right is to not utilize the services of those whose fees you don’t want to pay.

          • ALL I HAVE TO SAY TO YOU HOMEOWNER IS THAT IF YOU THINK YOU ARE SO SMART AND CAN SELL YOUR OWN HOME GO AHEAD DO IT. WHY ARE YOU ON HERE TRASHING REALTORS? O…I KNOW WHY. BECOUSE YOU NEED THE REALTORS TOOLS TO DO IT . YOU WHINE AND CRY THAT WE REALTORS SHOUD ALLOW YOU AND EVERY JOE BLOW TO GET ON MLS TO MARKET YOUR HOME AS IF IT IS SOME SORT OF RIGHT. WHY DONT YOU TAKE YOUR CAR TO CANADIAN TIRE AND ASK THEM TO LET YOU USE THEIR TOOLS AND THEIR GARAGE TO CHANGE THE OIL FOR SOME LITTLE FEE, AND THEN WHO CARES HOW CANADIAN TIRE PAYS THERE STAFF AND THERE RENT AND SO ON … DO YOU EVER THNIK OF HOW MANY JOBS THE ORGANIZED REAL ESTATE GENEREATS? DO YOU KNOW THAT BECOUSE OF US REALTORS WHO BRING IN THE COMMISION TO OUR BROKERAGES THE BROKERS GET TO EMPLOY THE SUPORTING STAFF , THE LANDLORDS GET OUR BROKERS AS TENNENTS , THE LANDLORDS PAY ALL THERE SUPPOTING STAFF , THE BOARDS AND ASSOCIATIONS GET PAYED AND THEN THEY GET TO PAY THERE EMPLOYEES AND THE LIST GOES ON AND ON AND ON… SEE WHERE I’M GOING WITH THIS? I HOPE YOU DO . AND IT ALL STARTS WITH US THE REALTORS WHO BRINGS THE COMISION TO OUR BROKERAGES AND YET WE ARE THE ONES WHO ARE BEATEN DOWN BY PEOPLE LIKE YOU WHO HAVE NO RESPECT WHATSOEVER FOR WHAT WE DO. IF YOU DONT LIKE US WHY ARE YOU READING OUR MAGASINE . IT SEEMS TO ME THAT YOU SHOULD NOT HAVE ANYTHING TO DO WITH THIS INDUSTRY IF YOU HATE US SO MUCH . GO READ A LOVE STORY AND STOP COMING HERE AND TRASH US ALL . YOU HAVE NO RIGHT TO DO IT UNTIL YOU WALK IN OUR SHOUES . THEN AND ONLY THEN I THINK YOU HAVE A SAY.

          • No offense but why would you call a home inspector or staging expert? It seems to refute your point. You recognize you need outside help for the minor solutions but go it alone on the intem that an inexperienced mistake could cost the most on. Most fisbos have no problem wasting the time of 2 or 3 agents getting free evaluations (eliminating the cost of an appraiser) so they can sell privately and then have the gall to brag about how they did it all by themselves.

      • Hi Homeseller,

        I’m a Realtor® and I really don’t have a problem with FSBO’s and other flexible ways that a home owner can save money. It’s called competition. So I have a small correction for you and then a comment on why Realtors® can’t charge buyers for their services as things stand right now.

        The correction is regarding “expect the seller to pony up for everyone’s commission”. The seller does NOT pay everyones commission. The seller pays the listing brokerages commission only. The listing brokerage then has an agreement to share that commission with another brokerage if they find the buyer. If another brokerage is not involved then the listing commission isn’t shared.
        Secondly – as things stand at the moment a buyer could NEVER be convinced to pay for their Realtors® services. If a realtor were to try that, the buyer would simply walk to the next office where the service is free.
        Paul Jackson (Broker) First Choice Realty, Barrie

  8. Marny Smith is the classic example of a member who feels she’s entitled to keep things the same and a perfect example of what’s wrong with our membership. She tells us FSBO companies do nothing but harm and Quebec keeping information from consumers is the real bridge to connect us with consumers. But look at the comments from others. We are seeing more and more who except this reality and more and more who are prepared to listen to consumers and know that providing a higher level of service and professionalism is the real bridge our industry needs.

    This must drive Martindale, Smith and other old schoolers crazy. We are even beginning to see Ross Kay moving away from fiction and into fact. I’ve said it before; with change comes kaos, then come acceptance and then we adapt. That time is coming where we will begin working together again and acually begin taking back what the fsbo companies are so easily taking away.

    Stop the fear tactics they don’t work. To say fsbo deals are falling apart in high numbers is simply false. Outdated and one sided studies are simply false. Consumers are smarter than that and we had better accept that soon so we can can get back on the field.

    • Please read my notes again I said I loved FSBOs and didn’t care about FSBO companies. They are no competition if they follow the law!

      I always thought that you were a real estate agent but you have proved me wrong. You said ”Truth is the FSBO industry is not subject to our rules but they are selling homes.. ” ”you can’t fight stupid
      If you were a REALTOR in Ontario you would know for a fact because you would have taken our licence, that REBBA 2000 is a law covering all trading and advertising trades in RE in Ontario. It applies to every FSBO company equally as much as it applies to brokerages in Ontario.

      You might be interested in the fact that ignorance of the law is no excuse so i must agree when you say ” you can’t fight stupid”.

      I have seen FSBO companies come and go. I have listed for 5&6% properties after they have run three months wit h FSBO companies. They are an excellent source of motivated Sellers.

      I said that you were wrong when you called Quebec registrants unorganized. I said that if you want us to respect your opin
      Ion you must also respect those of others but if you are not a registrant who knows the laws he is subject to why should we listen.

      And if you are a registrant not aware or ignoring the laws we are governed by then I can only hope you are one of the ones RECO takes time to catch.

      Regardless of why you are ignorant of the law you are speaking from a poor position.

      I have a different position than you think. I believe in the Privacy Act and PIPEDA for many reasons. We are often told, as an excuse, that the USA has been doing this for years. I have taken the time to search many websites to get information on homes I have owned in my own name in the US. I can neither find my information or asking and selling price. I cannot find the number of bedrooms, baths or pictures that were used in the sale of these properties so anyone listening to these arguments are being hood winked.

      The Competition Bureau took it upon themselves to cause Federal and provincial laws to be broken. I have asked that RECO step up to the plate and enforce those laws, no more no less.

      The FSBO companies have taken a hold in some markets but not most and they are no competition for an experienced agent.

      As to my comment regarding FSBO sales gone bad. I have personally helped a number of FSBO users get out of trouble by going in and negotiating a settlement between the parties. I have been privy to others in speaking with lawyers who were paid well to fix messes. Burying your head in the ground and not caring about the consumer is not an option.

      You must also know that when all this information is given to the public it will give anyone selling or buying property in Ontario an even greater right to refuse to have sale prices given to TREB or any other Board and agents won’t have the information either.

      It will only take one person having TREB and brokerages fined by the Privacy Commissioner to have everyone stop giving their information to TREB. I have had 7 homes in Ontario in the past 30 years and my information is on none of them.

      Any that happened as soon as the Competition Board made their decision.

      I am happy to see transition and there has been lots in 32 years. I resent that you imply that I am in the dark ages and wish to stay there.

      I on the other hand can say that you wish people to be able to continually break Ontario laws without punishment, and that you believe that people totally untrained in RE law or any other law should be able to deal with consumers in any way shape or form regardless of the law, putting them in jeopardy with no ERRORS and OMMISSIONS Insurance as is required by REBBA 2000 to fall back on when they screw up.

      You tell me who cares about the Consumer more.

    • Hi there HWR:

      Nothing drove me crazy, especially not the way internet savvy pirates set up shop on the back of a long standing way of doing business which has stood the test of time…until a purile hatemonger bureaucrat named Melanie Aitken entered the scene with a new found big club with ORE’s name thereon called Administrative Monetary Penalties ($10,000,000. per pop) which she threatened to impose on the gutless CREAcrats in a most unconstitutional and extortionistic manner. What nearly drove me crazy was the limp wristed CREAcrats’ turtle mmaneuver. But sane I remain my friend. Sooner or later the sludge rises to the top of a septic tank full of highjacking sludge mysters.

      Realtysellers/Property Guys/Comfree types?

      Sludgemasters par excellence.

      May the sludge be with them.

      I wonder if they have thought about selling insurance write-off used cars online from the Jersey Shores hurricane floods. As long as they state that they do not check out the history of the cars, that buyers should do that for themselves, hell, there might be money to be made there.

  9. Well written Mike.
    My take is that you are not looking for answers, but bringing to all of our attention, what is going on. I share your concern, the lack of qualifications, misleading representation and marketing pushed down the consumers’ throat.
    Bottom line, there is no group that can do for the consumer, what we can do. It is up to us to educate the consumer.
    I understand competition and love it. Just should be on equal playing ground.

    • Ok here is the deal if you have not figured it out. RECO is only interested in protecting the public not protecting the realtors. It is a great time for CREA to win some brownie points and go after RECO legally for not up holding the law re their definition of what “Trading in Real estate” is and go after the FSBO companies that are trading in real estate with out a licence. Crea would be protecting the public from these guys. Most fsbo sellers sell for less, take longer to sell and run in to more problems. Buyers do not want to pay a commission if the seller isn’t.

  10. Sorry for this book and for the record I am not afraid of competition but feel we all need to be playing by the same rules. I think government intervention is what we deserved years ago by way of the regulators of this industry when Melanie Aitken allied with several individuals to shake things up to allow for “more competition” from these private and discount companies. Without firstly addressing some important issues, a private sale company should not have the same legal authority to facilitate in real estate as members of organized real estate. What has happened with this change really has little to do with unfair commission rates as the huge majority of Canadians are quite willing to pay commissions to organized real estate members for their expertise and protections in handling perhaps the largest asset they own. People have always had a choice to sell their own properties and some will continue to do so and that is not the issue. It’s these private sale companies who feel they are entitled to “compete” in a business they technically have no legal right to participate in that is the issue. They want to have free access to the information as those who have paid for and do pay for its contractual collection and use. Is there no sanctity for the relationships and the transactions between clients/customers and agents created through contractual and agency law?

    In an article written in REM on July 07, 2011 I quote the following first sentence from the article. “Realtysellers Real Estate in Toronto is partnering with PropertyGuys.com, a private sale franchise network, to “bring dramatic changes to Canada’s residential real estate market by together offering unprecedented choice and innovation to consumers,” the companies announced this morning. “
    He then goes on to say: “The Competition Bureau’s actions pave the way for PropertyGuys.com and Realtysellers to come together,” Dale says in today’s statement. “This is the type of deal that consumers want and traditional agents fear. We’re excited to build a real estate powerhouse with PropertyGuys.com to give Canadians a better and more cost effective way to buy and sell their homes.”
    Within this same article Ken LeBlanc, president and CEO of PropertyGuys.com says “This partnership is possible because of recent industry changes that Lawrence pursued for years. Together we can now satisfy the underserved consumer demand for innovation, change and lower fees. This new union will give our current and future customers access to brokerage services that were previously off limits.”

    Here are a few examples of promotional remarks on the PropertyGuys.com website that confirm their role, in their own words, that they facilitate the selling of properties, just as agents do it seems;
    “We’ll introduce you to the same tools agents use and other proven methods to help you arrive at your own asking price.”, “We’re experts at marketing properties. “, “We have Canada’s best online listings.” as unsubstantiated as that may be, and my favourite the “Our Offer Maker® tool allows you to come to an agreement online. We provide a framework that lets buyers and sellers negotiate effectively and efficiently.” All this sounds like someone selling real estate services to me, wouldn’t you agree.
    What about some of the questionable information meant to advise the home seller, as in the Closing the Deal section regarding the agent writing the contract where it states; “your decisions and concessions are already binding before your lawyer actually has the chance to advise you on its contents.”, which is absolutely untrue with a properly written lawyer review clause for the protection of both seller and buyer, which is standard in my provincial AP&S. In the Showing Your Home section, “Agents arrange property showings based on their schedule, not yours. When you choose to use an agent your home must always be show-ready so that buyers can drop by with very little advanced notice.”. I have been an agent for many years and always make appointments based on the sellers schedule and shouldn’t you be ready to show your home on a moment’s notice because sometimes that is how you accomplish your sale. So why not regulate this business model?
    I don’t think this should be a matter for our boards and CREA but rather for the regulators who oversee the law to get involved as they supposedly uphold the protection of the industry and the public’s best interest in real estate trading. Perhaps since the Competition Bureau appears able to trump the role that provincial governments play in administering real estate law we need a federal level of government to oversee this industry.
    In the province of Nova Scotia the Nova Scotia Real Estate Commission oversees the provincial real estate trading act, but every time I read articles like this I wonder how this is allowed to continue? It seems there is a void in the role they play today and their effectiveness seems limited and if not obtuse. It seems the Competition Bureau has opened up opportunities for the public to be put at greater risk while trading real estate through these companies and our regulators have sat by very quietly. WHY is that? See the below excerpts from the Nova Scotia Real Estate Trading Act. It seems by definition, see (y) below where “directly or indirectly…”, that we have a new breed of real estate traders that need to be regulated so these companies will be held accountable for their actions and representations and to ensure the public and the industry is protected.
    Nova Scotia – Real Estate Trading Act 16/06/11 Nova Scotia Real Estate Commission 3
    An Act to Provide for the Regulation of Trading in Real Estate
    Be it enacted by the Governor and Assembly as follows:
    Definitions
    2. (1) In this Act,

    (f) “buyer” means a person acquiring an interest in real estate by purchase, exchange, option, lease or otherwise;
    (w) “seller” means a person disposing of an interest in real estate by
    sale, exchange, lease, option or otherwise;
    (s) “real estate” includes
    (i) real property, including leasehold property, or any
    interest therein. Etc…..
    (y) “trade” or “trading” includes a disposition or acquisition of or transaction in real estate by sale, purchase, agreement for sale, exchange, option, commercial lease or rental or otherwise and any offer or attempt to list real estate for the purpose of such a disposition or transaction, and any act, advertisement, conduct or negotiation, directly or indirectly, in furtherance of any disposition, acquisition, transaction, offer or attempt.
    Trading in Real Estate
    4. (1) No person shall trade in real estate or hold out as being available to trade in real estate unless that person is licensed to do so or is otherwise permitted to do so by this Act, the regulations and the by-laws, but only to the extent that the person is permitted to do so by this Act, the regulations and the by-laws or by the licence and subject to any restrictions, terms and conditions contained in the licence or under which the licence was issued.
    “Exemptions
    3. This Act does not apply to
    (a) any person not ordinarily trading in real estate who acquires real estate or disposes of real estate owned by that person or in which that person has a substantial interest, or an official or employee of any such person engaged in so acquiring or disposing of real estate;…”

    So what about “NO PERSON” shall trade other than for the exemptions and the one noted above in particular which would deal primarily with an individual rather than a company, barrister or trustee, etc?

    With those definitions and articles from the “Trading Act” how can a company that holds itself out as being available to trade in real estate through offering “professional services”, posting properties for sale on websites and by providing helpful packages which include the “Offer Maker for the “private seller” and that in the words of Dale “By partnering together, PropertyGuys.com and Realtysellers will be uniquely positioned to deliver the broadest range of professional services…” be exempt from governance by these laws? The fact that PropertyGuys.com has built a 100+ member franchise business out of providing real estate advice and service, albeit in a different form than what we are used to seeing, is evidence they are involving themselves and facilitating in the trading of real estate.

    “Professional services” you say?
    Is it not time for the regulators to step up and address this blatant contradiction to their authority for the benefit of this incredibly relevant industry to the Canadian economy?
    As a licensed agent I am dismayed at the indifference our representatives and regulators have shown the industry and the public through their inactivity in correcting this pretense by these companies and the Bureau in this reckless crusade to create change.

  11. Obviously you don’t know the law. The FSBO companies do not have to be licensed and their activities are not in any way violating any regulation, rule, bylaw etc. Comfree, property guys et al have been in business for years, the big wigs at CREA and other provincial bodies know they had no legal leg to stand on and thus didn’t pursue any action. By the way, Comfree is now a licensed brokerage, giving customers the FSBO option as well as MLS. Brilliant move by them…

    • Many of comfree sellers think you should be contacting their broker to discuss getting paid and how much. Have you ever tried to contact their so called agent? Even their “leave a message” clicks off before you can leave one. Some service. Take the money and run would be more like it.

      • no kidding . I would call it “Pay us a few thousands for literally nothing and sell it yourself ” What a joke!!!!

  12. Apparently, you missed the memo. Don’t compete with your “competitors.” Make them irrelevant.

    A good Realtor can choose from so many good clients who understand and value the work they do and the results they bring, that for a Realtor to trivialise his career/life by worrying about converting those who don’t yet comprehend the Realtor’s value is ludicrous.

    Its as pointless as trying to convert people’s religions. The unconverted don’t want to hear you. It’s like talking to a teenager . . .they already know everything, why talk to you? You might as well prosper in the meantime by preaching to the choir . . . they hear you, they understand you and you actually make the miracles happen for them!

    If the unconverted ultimately find their tech-savvy, uber-urban-cool superior education and new-age marketing strategies don’t actually bring them the results they need as they try to sell real estate on their own, (or on their own with hefty payments to FSBO promoting companies,) they will eventually seek salvation in the work of the professional Realtor. I guarantee it!

    You must understand that 15% of people will ALWAYS buy the cheapest. 5% MUST always have the most expensive . 80% are VALUE SHOPPERS. Value = quality/price.

    Whatever convoluted road the consumer must travel to understand value, ultimately if you can bring the value they seek – well priced results – you will have access to 80% of the business.

    Everything else is irrelevant.

  13. As a Realtor®, I see both sides of the argument. I work hard, I preview listings, I learn my market, I network and I keep in touch with my clients on a weekly basis at least. Common complaints I hear from expired listings is “my Realtor® didn’t keep in touch, didn’t market, didn’t communicate and basically didn’t do much of anything”. The perception out there in the public is that a lot of Realtors® do little, if anything, for their large pay-days. I agree! A lot of Realtors® are lazy and have no idea of selling. During the “easy times”, when listing were flying off the shelf, they took orders; selling wasn’t involved. Now that the rubber has hit the pavement, they actually have to work. There are ways to overcome the perception of being over-paid; learn the dialogue, especially, “overcoming objections”. This is Real Estate -101.
    I admit, when confronted with a discounter that my client absolutely needs to see and eventually writes on, I write my commission into the offer as a “subject-to” on the offer. (My clients have that much faith in me).
    FSBO’s and FSBO sites are a fact of life and they aren’t going away. Learn to cope and quit whining and learn to do your job properly.
    The business model of taking as many listings as possible and hoping that someone else is going to sell them for you, doesn’t work any more. Clients are demanding and deserve some service. It ain’t all about your back pocket cupcake; it’s about the client’s best interest.

  14. Nice article, I firmly believe that our regulating body has let us down. They spend so much time regulating licensed realtors and don’t pay any attention to what is going on outside, And yet we pay so much to belong to our boards, for what I am not sure. I find my fees keep going up every year but really hasn’t done anything for us. Its tougher in this industry as it is but now these companies out there making these claims will definitely hurt us more. One more thing is our board has excess profit but do they return it to us, of course not! I belong to the Vancouver Board.

  15. Great Article!!…It amazes me that these FSBO sites can get away with their unethical behaviour and advertising. However, RECO (Ontario) wont proceed with any action unless there is a complaint. So the the question becomes…..Who wants to be the first Realtor or Brokerage to file a complaint? Who has the time and money to proceed? Unless this happens….those FSBO sites have free rein of unethical behaviour of our industry…not to mention that it would be tagged as “Sour Grapes” on our part.

  16. As a former REALTOR reading the above it is clear to me that you fear this new competition. The closed shop, sky high commissions extracted by this industry is what brought this new competition to your doorstep.

    There is a principle in economics which says: excess profits breed ruinous competition.

    If you are honest with yourself you know the real truth. You brought this on yourselves!

  17. If I as a Real Estate Broker in Ontario pay someone to refer clients to me it is called birddoging and is illegal under REBBA2000.

    On the other hand a FSBO company incorporated is a person in Ontario. Yet that same law seems not to apply. If a FSBO company refers clients to an agent on a regular basis for no better reason than the agent is too lazy to go out and get his own listings it is still bird dogging and is still illegal under REBBA 2000.

    Maybe RECO is also worried that it will be charged under the Competition Bureau’s rules and so is no longer enforcing this part of the legislation they are bound to police.

    Anyone now caught bird dogging by RECO can just point to RECO’s record of turning a blind eye and plead that their prosecution is arbitrary and they had the right to believe that this was no longer prosecutable.

    The FSBO companies are blatant about flagrantly defying and breaking the law, as are the agents who are using them to say what the registrant can’t under the law without jeopardizing their licence…. remember the FSBO companies “selling properties have nothing to lose and have the weight of the Competition Bureau to support them, to back up their rights and to break any laws they chose.

    The FSBO companies ‘selling properties ‘ have nothing to lose and have the weight of the Competition Bureau to support them, to back up their rights and to break any laws they chose.

    • Marny,

      Great added Comment and another topic clearly misunderstood and communicated to agents in Ontario.

      RECO does not allow you to pay bird dog fees but you are allowed to pay a marketing company to generate leads for you. Every agent who has a Google Ads account is already do it.

      Technically, any agent who operates under a Franchise brand is paying an unlicensed corporation for leads or referrals if the Franchise brand is funneling leads back to the agent.

      My understanding as supplied to me for a legal perspective, is that a BirdDog Fee is something paid out contingent upon the referred party entering into a contractual relationship and when such fee is paid out of the earnings generated from that specific relationship because at that time FULL DISCLOSURE must be made to anyone receiving funds in a real estate transaction.

      Now if RECO is saying a licensed agent in Ontario cannot pay for leads with no attachment to a transaction, then at least 70% of all Ontario agents would be found in breach.

      ComFree.com and PropertyGuys.com are simply marketing companies and nothing more. As such they can accept payments for lead generation as long as not attached to a transaction.

      Would be great to hear Merv’s comments on this one.

      • Hi Ross

        Well said…. so here it is.

        REBBA 2000 , an Ontario law says specifically that ” a licenced agent in Ontario cannot pay for leads” with or without any connection to a transaction, excepting only those leads that come from another Registered agent or brokerage.

        You are bound by the Act so you should try to learn what it says.

  18. Michel and others make some salient points:

    1. Competition is good for everyone.
    2. The myriad of associations we support with our hard earned dollars are more than willing and able to sanction its members but fail miserably at creating a level playing field, thus allowing FSBO’s and “associated” realtors to work the system in ways that we are not.
    3. The public appears to only be protected from licensed Realtors or those pretending to be one. Call yourself a FSBO and you’re good to go.

    One thing we should realize is that, until these guys start eating our lunch in real terms – i.e. 25-30% of the market (including the major urban centers), they will be allowed to roam at will. For various reasons, including not wanting to rile the Competition Bureau, TREB, OREA or CREA would rather spend their time and effort coming up with new ways to earn revenue from its members than pick a fight with the FSBO’s.

  19. Good Article and well Written. As an Industry we have done a poor job explaining to the public what we do for our Commission and as a result of this our industry has become targets for these FSBO types and their misleading marketing to the public.

  20. It is no longer fashionable or respected to be a licensed realtor thanks to the Competition Tribunal & the media who pimp for them. If we were other professionals like accountants or engineers, and represented by a ‘real’ industry organisation instead of the likes of CREA/OREA, our reps would be all over these internet ‘pikers’ who hold themselves out to be real estate marketing professionals, but who in reality simply collect fees for ‘zero’ service, and find creative ways to convince the public that they are performing a valued service. Our complacency is our downfall.

  21. Michel:

    Re your question:

    “…does our real estate license not mean anything any more to our licensing authorities?”

    Apparently not.

    What does seem to mean something to them is this:

    They have a handle on ‘you’ for transgressions, but on no one else.

    Thus, those who study for and continually pay for their licenses are exposed to in-house retributions, whilst no one else is.

    Most important, ‘they’ have an ongoing hand in your back pocket, whilst in no one else’s. Thus, you ‘pay’ for the privilege of being pilloried by ‘them’ for mistakes, whilst no one else does.

    I will say it again, for the umpteenth time…from the CREAcrats on down, the ‘system’ is badly broken.

    A badly broken system begets a badly broken industry.

    A badly broken industry begets a badly broken membership.

    A badly broken membership begets a badly broken lack of education regarding internal governance.

    A badly broken lack of education about internal governance begets a badly broken response to same.

    A badly broken response to badly broken internal governance begets pure apathy on the parts of the badly broken uneducated membership.

    A badly broken uneducated membership begets a badly broken self-image.

    A badly broken self image begets a badly broken face to the public.

    A badly broken face to the public begets a badly broken road going forward.

    A badly broken road going forward begets a final call for overhaul of the badly broken system, and its beneficiaries, the ruling, inhouse ORE bureaucrats, those badly broken ivory towers types who don’t suffer the slings and arrows of the paying, ignorant, apathetic, members.

    Too many powerful chiefs; not enough educated Indians.

    Kinda reminds me of the Attawapiscam/Chief Spence disaster.

    • Follow up to my above comments:

      There is a movement afoot amongst Canadian indians known as…

      “idle No More”.

      Maybe there needs to be a Realtor driven movement against the ORE bureaucratic organizations, known as…

      “Pay Them No More”.

  22. I don’t have actual statistics of a properly done study but many buyers using discount agents and flat fee companies have discovered — to late — that they saved $5,000 in commissions and lost $10,000 on the selling price?

    A very old but well done ten year study in Philidelphia showed that homes sold through agents sold for 9.5% more than those sold by owners directly to buyers.

    Has anyone done some research to compare selling prices by FSBOs v. agent assisted? When opinions are up against facts, facts win.

    Another factor: a broker in Atlanta claims he tracked the sales to listing ratio of a large flat fee company and found that only 20% of the listings sold and 80% either expired or were withdrawn. How about doing that in GTA and elsewhere?

    • Hi Jerry we were all told that in the 70’s..That a Realtor will sell a house on average for more money and Buyers will discount their Offer less a Commission so Sellers do not see any savings or advice…still applies today.

    • Jerry,

      Had to jump on this one, as each year for the last 22 years (this started with the birth of Grapevine and Help U Sell entering my Marketplace) I did full research and fully document sales prices in my town of operation. ( Computer MLS data was in it’s 2nd year of publication available for download from my local MLS)

      The data also included as a separate entry the Discount Brokerage results against the norm. Grapevine charged $495 back then for the FSBO and a local Broker did full mls for $1500.

      In both instances there was a loss in Cash Out Equity for the homeowner when selling privately or with Discount Brokerages. It was without compromise and the data would hold up in any courtroom because the sample was the ENTIRE sold inventory for a calendar year in my ENTIRE city. (this can be accomplished today in an hour or two in a spreadsheet download.)

      But…..I was not legally allowed as a licensed sales rep to disclose these facts at any time to the public or my clients. The Consent Agreement prevented me from publishing these stats and The REALTOR CODE prevented me from suggesting “I could do something better than my licensed competitior.”, rules that are still followed today!!

      What was needed then and now was for an independent audit to be commissioned and publicized by an unlicensed party because they legally could do it. A Consumer Reports type commissioned report or maybe a JD Powers audited review.

      MyCityHomeSellingFactsFiguresTruthsandLies.ca could have served this purpose on the day realtor.ca was launched?

      Why did this never happen?
      Why has still not been done?

      There is something wrong with a profession where an Agent can list and a sell a large number of homes in a given year, where the SELLER NETS 2 to 3% higher cash in pocket using my services versus a competitor and still I am can’t publish it because it infers I do a better job than my competitor not just a DIFFERENT result.

      Now it is my understanding that audited results will begin to be published and communicated to the press and consumers and there will be nothing stopping Agents from providing links on their own websites to this site to back up their own USP.

      • excellent, Ross, glad to se you did the math. We used to have stats like that available to us but no point if we can’t use them.

        That’s why FSBO companies are no competition for good experienced knowlageable agents! Kudos

      • Uh oh! Ross is of the reality train again. Ross if you’re going to throw crazy and outlandish statements or stats out there – back em up. Oh right you’ve been asked to do that before and disappeared.

  23. Orange Square Realty? Didn’t I just receive a spam from you stating that you are a new commission-free or reduced commission brokerage?

    • Leila !
      Orange Square Realty is not a commissio-free company, nor is it a reduced commission company.
      However, our realtors are allowed to charge any commission they want.
      If you ask any of the hundreds of realtors that took my training you will hear about my techings of a reator’s VALUE.
      However, we as a brokerage do not dictate to our reators what commission to charge.
      You seem to have missed the argument. This article is not about charging more or less commission, it is about the value of our license as realtors and being true to the public.

      • Michael,

        Are your agents allowed to offer Limited Representation or are any listings you post to the MLS Full Representation ONLY?

        Ross

  24. We could offer the same service at the same rate, you list the property for $1500 take pics and walk away and leave the home owner to fend for himself. After the home owner gets tired of dealing with his own listing it’s an easier transition into a proper listing. Why would you goto “FSBO” if RE/MAX will do the same thing? They would be out of business in weeks.

  25. You are legally allowed to operate a Marketing Business outside your Real Estate Agency business as a SEPARATE unique business and all Agents should be made aware of this and learn to use this opportunity.

    Every Real Estate Agency business uses an unlicensed Marketing Business in one way or another whether for a small item like business cards to websites to personal promotion campaigns to property promotion campaigns.

    Your Marketing business can be hired by any Canadian with no restrictions or limitations this includes Private for Sales as long as it is a separate business.

    So JoeSmith.com can be a marketing business who markets real estate. JoeSmith.com can offer, for sale signs, feature sheets, advice on marketing a home, tips on holding a successful open house etc.

    operating at the same time but independently of…

    Joe Smith sales rep with abc realty brokerage is able to offer real estate services as applicable to provincial licensing requirements.

    The consumer can hire JoeSmith.com and Joe Smith sales rep, both at the same time and fully independently.

    One can only imagine the Professionally handled Marketing Campaign that $15,000 could buy for any $1,000,000 property.

    The next big threat to your commission revenues is not the current FSBO companies folks, it’s the next wave companies entering this space.

    • Joe Smith, a registrant, can definitely have a separate marketing company called JoeSmith.com.

      It is important to know however that JoeSmith.com cannot represent,or do or say anything, under Rebba 2000, that Joe Smith, a registrant, is not allowed to do say or represent.

      That is where the law is being broken and why most marketing companies are not using the registrant’s name in the name of their marketing company….they don’t want to get caught and lose their licence.

      • Agree Marnie,

        Now, In your opinion what actions/services can a marketing company Complete or NOT Complete, under RECO?

        • A marketing company can market as long as it follows al of the provisions of REBBA 2000.

          I am not sure you are in Ontario as HWR is so you may not know Ontario law.

          Thanks for your comments

  26. Great letter Michel.I've been licensed since 77 and a broker since 79.I was an office manager for Century 21,worked with a few companies and had my own brokerage for numerous years,and never been sued or bought a hot waster heater.Had only one comp[laint for not lowering the price on a house which was withdrawn after I co-listed the property at a reduced price and bought it the next day at the reduced price to put my money were my mouth was.Yet I still live in fear that the lettering on my sign might be incorrect by an inch or the realtor logo was scratched off by a raccoon while i was sleeping.

    • Honestly, don’t worry about that stuff. When they challenge you on it, challenge them. They’ll back down once they realize your serious and acting in good faith. The biggest things to be careful about are mismanagement of trust funds and misleading advertising, not making mistakes (but do be cautious and be sure to prove that you’re acting in good faith)

  27. I believe Michael makes some very good points here. Where is our CREA to address these issues? If we are a self-governing body, then who is governing the non-licensed people? I don't believe Michael says that they should not be allowed to fun FSBO sites, just that they should be clear that these sites not make themselves out to be professional Realtors(TM), nor make false claims, nor mislead the public, nor act as 'unlicensed assistants'; a pretty long list of wrong doings right in broad view of a government that seems to care so much about the purchase and sale of real property for real people.

    • let’s stop blaming all of our organizations and start blaming those responsible who don’t care. the legislators and the people hired to enforce the law… in Ontario they are called RECO!

  28. Hey Michel, thats a very good article you came out with. I think its an eye opener to all the Realtors who have to earn their Licence in order to Trade in Real Estate and we get whipped for little mistakes we make. Licencing authorities does not hold back collection of Licencing fees when the time comes but why are they not looking into these silly things done by non-licenced Realtors. Where is Fairness displayed here.
    Its time for Realtors to wake up and smell the roses or one day this profession will be doomed.

  29. Michael,
    I couldn't agree more. My concern has also been the safety of the general public when using these sites. Who does the due diligence on the buyer? How does the public know which documents to share or not share? In these times of title fraud and mortgage fraud my concern lies with unsavory criminal types misleading a seller and gaining all pertinent facts required to fraudulantly gain access to information for these purposes. Why will the government not address this?
    Andrea Reid
    sales representative
    Coldwell Banker

    • RECO is the only body that can address these problems. They arE the only enforcers of REBBA 2000 and the safety of the general public is in their hands!

      They have the law they just need the desire. Provincial Offences Officers have been hired to make sure buyers of new properties who flip them must belong to the Ontario New Home Warranty plan, and sales representatives have been charged with aiding and abetting in court. Why can we not have these same officers policing other areas in Real Estate.

      RECO needs to protect the consumers. Instead they are busy putting all of our 24 Mandatory Update Courses online so that those who are already cheating can just hire someone to sit at a computer and take the courses, pass the courses, and get the credits. Someone will see this as an employment opportunity.

  30. Well said Michel, It is past time that the Govt. stops picking on REALTORS and start looking at the services we actually provide. Opening up commissions is one thing but opening up MLS is totally another – it is or will be a disaster and we as REALTORS will yet again get the blame.

    Don Frederiksen Broker,

  31. Perhaps CREA shouldnt allow unlicensed Sellers to sell their home.
    Secondly advertising importance of Licensed Agents should be everywhere.
    I sold many FSBO properties and in most cases they do not have legal expertise once they receive the offer.
    Most Buyers feel much more secure buying their home through licensed realtor. They know that they are receiving fair, ethical,knowledgeable and expert representation.

  32. Most Realtors either say that we won’t be making any money, or complain about us breaking the market. Regarding the market – it’s an open market as long as you’re following your franchise, local & provincial rules & guidelines, and regarding making money – *big ear to ear grin*

    My suggestion to Realtors – stop whining and complaining about the business models of others, whether licensed or unlicensed. If you spend that time & effort improving & working on your own, you will thrive. Leaders & successful people don’t get ahead by bitching about others, they get ahead by RISING above the others.

    Good luck to all!
    Jay Rana

    /End

    • @ Jay,
      Leaders take stock in their livelihood and make change when it’s required….doesn’t make them whiners for taking an active role in the profession.

      • At the first instance they were given an opportunity, a leader would take that opportunity & run with it – especially if there’s a growing demand to change the way a business works.

        Not only would this have put many unlicensed FSBO out of business, but the Realtor(s) & Brokerage(s) who took the idea and ran with it would set themselves apart from (using Toronto as an example) 35,000 available agents and would be planting the seed of guaranteed constant business which caters to all types of client requirements.

        A leader would not sit idle as their profession is questioned (and rightly so, sorry to say) and then whine as other Realtors, Brokerages & businesses start taking significant market share just because they listened to the growing sentiment of the public that they cater to.

        A leader does not hide behind the shackles of institution – they maximize their growth within the confines of the institution to continuously adapt to changing times & sentiments.

        All the best.

    • Yes of course you follow ” local & provincial rules & guidelines”

      Excerpt:

      “Also as a token of appreciation for your business as well as any referrals you send my way, I will offer rewards ranging from Cash-back, Flat screen TVs, Computers & Lap-tops as well as Apple® products such as iPods, iPads & iPhones, and much more.**”
      http://www.xxxxxxxxjay.rana (elision by PED)

      Does telling others that REALTORS who charge 2.5% are greedy count as whining and complaining about the business model of others?

        • It always seems ironic to me that those who speak of following the rules would openly advertise bird dog fees without thought of the RECO and CRA repercussions to those on the receiving end, but this even extended to telling students and new entrants that this is what they need to do in order to get clients and so from day one on the job these openly violate REBBA as well.

          Your hair would stand on end if you witnessed the open advice to buyers and sellers under contract with another brokerage particularly on how to handle their APS or direct their representative.

          Begs the question as I’ve raised in here before – if a REALTOR can’t be bothered to acquaint themself with their own rules how can they possibly be expected to acquaint themself with all the acts and by-laws that govern the purchasing of property.

          • Are you implying that I do this? If so you are sadly mistaken.

            I work in Toronto. There are other Marni Smiths elsewhere.

            I have never felt the need to advertise much so you haven’t seen anything from me!

  33. Sad thing is that instead of embracing change and moving with the times, most Realtors are still stuck in the past decade where they were raking in oodles of $$ per transaction and refuse to change. In order to justify them not changing with the times, they’ll create all sorts of fear mongering regarding discount brokerages (actually licensed under CREA & provincial & local boards) and agents who offer significantly discounted rates. This may work for the boomer generation, which I find still has no problems paying the 4.5%-5% per listing – however the Gen X’ers for the most part refuse to play this game.

    If Realtors wanted, they could have prevented such unlicensed FSBO companies from even taking birth by offering discounted rates & doing their business efficiently – however due to most Realtors wanting their cake & eating it too – this did not happen. Result? 3 or 4 unlicensed FSBO companies popping up and over time, getting more and more popular as an alternative to paying large commissions.

    Cont'd…

  34. In terms of the Listing Agent/Brokerage, aside from suggesting staging, effective realistic pricing, posting the listing and holding a few open houses & following up with the Buyer Agents that showed the property & providing the sellers feedback – what do they really do to sell the property? Most Realtors will want my head on a platter if I type out the answer, but the truth is that the Buyer Agents are the ones that end up convincing their clients to purchase the property. Yes, in some cases the Listing agent will sell the property to their own buyers – but even in that case, they do receive compensation for their efforts in bringing a buyer.

    This brings me back to my point of how can a Listing Agent/Brokerage justify charging a percentage per sale price for residential listings, when the efforts to sell are practically the same?? As the boomers are retiring and Gen X now has a world of knowledge at its fingertips via the world wide web, people are realizing this and are demanding change.

    Cont'd…

    • “aside from suggesting staging, effective realistic pricing, posting the listing and holding a few open houses & following up with the Buyer Agents that showed the property & providing the sellers feedback – what do they really do to sell the property?”

      And herein lies the problem. Consumer complaints against REALTORS are always about not getting service for the cost, it doesn’t matter either if all they pay for is a mere posting when they complain they never differentiate between what they paid for and what they didn’t. No wonder when they have REALTORS promoting as comprehensive industry standard that which what many of us consider as just basic service.

      I suppose you also think it takes the same marketing and effort to sell a $2 million dollar property? It must be only in your sphere of influence that all properties are created equally unless of course you’d like to suggest that it requires the same marketing and effort to sell a $400k property on a sleepy East York side street as it would for one at the corner of Don Mills and O’Connor? Or for that of one sitting on subsiding ground in Swansea; beside a gas station or tenanted by the underemployed. What about the ex-grow-op, the house stygmatized by murder, the live-work unit with few permitted uses competing with 6 others; the non-conforming property on Stouffville Rd? All the same effort?

      Sure go ahead, stage and effectively price the house beside a gas station because it takes no other effort than the comparison down the street. None at all to ensure that you understand the land contamination history or threat thereof; permitted land usage; or even the legalities or illegalities of rooming houses and the target market you have to know how to reach then effectively sell to.

      How’d that realistic pricing and staging work out for you with the Aldwinckle and Wilson properties?

      Some of us require higher fees because our clients expect and receive more – the expertise and knowledge to sell properties well and for more than just an average return. We do it by pulling out all the stops not by doing the bare minimum- visit-stage-price then hold an open house with our faces and low fees pitch plastered all over the seller’s TV screen to drum up business as was noticed to the shock of myself and my clients when we walked into one of your open houses.

      Your real truth is not this defensive bafflegarb you wrote it is that you base your fee model on the perceived worth of your services as do we all – your clients obviously agree and so too our clients agree with ours. Your strawman stock trading analogy does not consider that some will always seek the lowest cost alternative or even defend one’s self in court rather than hire a professional in the hopes it works out in their favour.

      • Ah Penny Elizabeth Dutkowski, nice of you to chime in! From one webforum to this one, you decided to cyberstalk me here..very nice.

        BTW, you seriously have to move on from that TV thing.. we had asked the client to use the TV and where Realtors plaster their ads and faces on their cards and print material, we simply had a running ad of the clients property along with details of our service on screen. Seriously, get over it.

        My response to the original post was within general context of overall public sentiment and even acknowledged that there is a market that doesn’t mind paying high commission – however the younger market ie. Gen X’ers onwards are much more educated and prefer having the options of lower commission and even the opportunity to sell on their own.

        Despite the constant negative attitude you create in other webforums regarding this topic and despite your uppity, demeaning attitude constantly being called out, you still seem to not get it, nor do I expect you to hence having you on ignore since last year.

        Instead of cyberstalking me, use the energy to sell & get people moving.

        All the best in your endeavours and please, do not cyberstalk me any further. Go make a sale and grow your business instead. Good luck to you and the team at HomeLife/Bayview Realty Inc., Brokerage*

      • Hats off to you as always, PED. In the best interest of our clients, and in expediously putting a contract in place as best we can so that everyone is satisfied, you speak the truth.

        Part of it entails ascertaining whether we are working with a WalMart client or one of Nordstrom’s identity…we are paid for the knowledge we bring to the table. Now should the WalMart type client pay us less? I don’t think so, in overall percentages because it should always be about the Net they walk away with… but they could always elect to work with a WalMart thinking agent, in lieu of, perhaps.

        I am so thrilled when I hear a client say: you work in an unconventional manner (as colleagues said for years), but for years, I could not quite understand what that meant. Why? Because, truthfully, I thought everyone worked the same way I did. I never thought to question how others were programmed to work.

        Not until I starting reading REM and participating in the forum, wherein we learn all the methods some others use. Now I get it… there are a few of us clones out there (haha)… and it’s a pity we aren’t all in the same trading area… what a team we’d make :)

        But in the meantime, when I would have a client for your area, I know without a doubt they would be well taken care of when I referred them, even so you are only a hour away… a whole n’other topic… refer out everything and anything that smells a little bit like it’s outside your area of expertise, should be the mantra of many who do not subscribe to it.

        When you go the extra, extra mile, you can dictate your price. But there’s room for everyone, and the chief thing that matters is that “marriage of the mind.” If people don’t like you, or feel comfortable with your knowledge-range, it’s doesn’t ever matter how much you charge.

        For some it will always be too much. Because until such time as the public understands what effort some of us put forth, there will be no educating the masses. They will always think they are right, even when they aren’t. And the truth is, they are. They are right “for them.” Life goes on. Next. It goes to the root of: if you think you can, or you think you can’t, either way you’re right. (I enjoy reading your rebuttals, tremendously. Keep up the great repartee).

        Cordially,
        Carolyne L
        http://www.Carolyne.com

    • I have been in the business for 32 years and their have always been FSBOs and Discount Brokerages. My first sale was a FSBO and I found that selling FSBOs was an easy sale as there was no one fighting for the Seller.

      Everyone has the right to sell their home by themselves. Only registrants have the right to sell someone else’s property, to advertise that they sell or have sold others properties.

      I was in Australia this year and there Real Estate sales seems totally uncontrolled and haphazard. The consumer is at the whim of whoever walks in and they are right now considering adding a new level of regulation.

      They are taking steps forward and we seem to be taking steps into CHAOS.

  35. If you're an investor or trader, would you still like to pay the higher fees that stock brokers charged prior to the advent of self-trading? In my opinion, you'd be lieing if you say yes (of course this does not apply to "noobs" who would rather pay for the hand-holding due to lack of confidence, time or experience)

    Also people are waking up to the fact that percentage based sales don't make sense, plain & simple! Honestly, when we're looking at residential property sales – why should a Realtor charge more for selling a $600K property vs a $400K property – when the marketing & effort are pretty much the same? If you stop and think about it for a second – it makes no sense at all! People are waking up to this and are demanding change! If you are an effective & efficient Realtor, it will take you the same amount of time & effort to sell a property that's listed for $600K as you will a $400K property – again, this does not take into consideration changing seasonal markets & changes in the economy or interest rates.

    Cont'd…

  36. Although I do agree with the opinion of the non-licenced FSBO companies using many misleading tactics – the bitter truth is that we (as Realtors) have nobody to blame but ourselves for continuing to operate as if we're in the dinosaur age.

    Look at stock brokers – before they were the exclusive point of contact for someone to buy/sell stocks for the public – however now, anyone and everyone can trade privately on their own for a small fee to the bank or financial institution.

    Likewise in Toronto, if you want to sell your property – all of the "big names" in RE are charging no less than 4.5% – 5% per listing. With the public becoming more and more tech-savvy as well as being more knowledgable (due to the endless amount of online resources & educational tools for any subject you can think of ) they don't want to pay the 4.5% – 5% per listing. On a $500K property, that's $25K+HST lost in profits for them!

    Cont'd…

    • i wonder Jay do you work for free? The difference between marketing a $400,000 property and an $$800,000. Property is large, as are the expectations of the clients

      Maybe that’s because you treat them all the same, or don’t have experience in the differences t

  37. We, as an industry, need to adapt to change. I do agree that many of the ways the FSBO companies promote themselves and bash realtors is not ethical or fair, however, as has already been said, we need to improve tha value we offer. The realtors who can provide value to their clients will survive in any market with any competition. This may require some adaptation along the way.

    As our market slows, which it is doing here and I’m sure in other areas across the country, it becomes harder to sell property, for the FSBO and the realtor alike. The difference is, a skilled realtor has experience, education and a good understanding of what is happening in the market. A fsbo generally just has a sign on the lawn and a listing on fsbo.com.

    Most of you sound like ontario teachers complaining about losing the ability to bank sick days.

    Let’s add value for our clients and FSBO will come and FSBO will go, but REALTORS are here for the long haul.

  38. Excellent insight and relevant questions! It would appear we are heading, if not already there, back to the days of anything goes and Buyer Beware.

  39. This seems to be the way things work these days. We have regulators that don't regulate, provincial police that don't follow court orders and enforce the law consistently and many other similar examples. When will we get a government and publicly funded bodies that simply do the job that they were mandated to do?

  40. You are right. They can claim whatever they like. So why are we paying $310 a year to CREA. There are over 100,000 real state agents so that is over $30 million a year and if the number of FSBO's is increasing. L.J.

  41. Excellent synopsis Mich…too bad only Realtors are reading these blogs…falling on deaf ears as far as Reco is concerned.
    peter

  42. A Seller not wanting to disclose property issues does not want a seasoned sales rep. with a trained eye snooping around or a sales rep. with the muscle of RECO provided lawyers to compicate things in the event of a lawsuit. Buyer Beware!

    • I agree with much of the article and have been saying a lot of these same things for years, how come Realtors can’t even have business cards made without jumping through hoops of “is this the correct wording” or “is this going to get me in trouble” can’t post something anywhere saying Sold in 1 day full price etc without a Sh*t storm but fsbo companies can make any kind of claim they like without anyone governing them.

      I also agree with a lot of comments on here that we did this to ourselves, not showing our past clients our weight in gold has been our own demise, we make it look easy we don’t stress what we are doing behind the scenes or why they need us, so in turn they feel they don’t. Also too many fly by nights in our industry, I’m always amazed by this because for me getting into real estate was not easy I found the courses challenging and financially there is enough of a commitment but once you have your license your on your own so to speak, I’ve dealt with clients who have told me horror stories about other agents they dealt with and I think “please stop telling people your a realtor you make us all look bad” but that’s another big problem with our profession is that we don’t have a stricked code of conduct for every agent everyday, I agree Real Estate agents should only be full-time none of this “I just sell 2 houses a year for vacation cash” again makes it look like you don’t need a realtor and we are all just slackers looking for easy money.

      I also think we as Realtors should unite and should be demanding proper representation from our professional organizations that we pay into, let have a vote on each person who represents us just like voting for a judge in the states, give us your best pitch, what do you intend to do if your elected? In a 4 year term if you don’t do it out with the old in with the new, also why isn’t there someone’s working for these organizations who’s only function is to continue to beraid governing authorities with the malpractices of these outfits, I’m too busy selling to be writing letters and emails and seeking out the misrepresentation of these companies but when someone composes them in an email like this I have time to review, so there should be someone at Crea who’s entire function is just to investigate on their own these websites/ their advertising practices/ their misleading information/ there slander etc and get it investigated and get it back to Realtors in a way that we can use it to our advantage.

      And lastly there is unity in numbers and if we as Realtors knew what that really meant or how to fully use that to our advantage we wouldn’t be in this position. I know the industry has changed there is no denying that and we need to also change, so let’s decide what that means 100% and start holding ourselves and industry accountable to this change.

  43. Mls.ca goes away and so does the ability of any non licenced companies marketing strategy. Realtor s have become so reliant on paying someone to market their listings the idea of true competition scares the heck out of them. Why is crea marketing properties? These companies are just telling the public what our organizations have been doing to realtors for years , we’re all the same. That is our own fault. We let crea market our properties for us because most agents don’t want to actually compete in an open market. Make this a truly competitive business and these companies would disappear because they cant afford to market properties unless we all pay to do it for them. The realtors working with these companies just need to get sued a few times by someone who gets screwed by a private seller to make them realise what they are doing isn’t worth it.

    • “Why is crea marketing properties?” Great question! This IS the fundamental question we all REALTORS[r] need to have an answer from CREA! In my opinion, REALTOR.CA (formerly MLS.CA), and for those in the Greater Vancouver area, REALTYLINK.ORG and REALTY IN PRINT, will do no good to REALTORS as a whole but will harm the cooperation among REALTORS in the long run. Why CREA and local boards market listed properties to the general public, when those listed properties are meant to be sold with the cooperation among REALTORS only??? Let the individual listing agents do the marketing of their own listed properties to the general public (only if they wish, and not using funds of all REALTORS – including those buyer-only agents). CREA and local boards must keep data of all listed properties accessible only to REALTORS in order to maintain the cooperation among its members.

  44. Representation is something that I believe a lot of buyers would like to have and should have. I will be educating my children to always seek out representation for their own protection.

    IF my daughter were to open a door to a perfect stranger with her 8 month old baby girl on asleep in her bed, while her husband was away (as is the case with many military families)…or IF one of my son’s allowed his wife to do this…well then I did not complete my duties as a father. Our lockboxes ensure only REALTORS are able to gain legal entry and we as real estate professionals take a lot of the risk away by asking you to leave your home for a short time.

    We often forget about the safety factor and in my opinion, these FSBO companies are a prime target for would-be or active criminals to gain access to your phone numbers, address and even your names. So be careful…the next victim could be the daughter of your local FSBO company.

    I have sold properties for the past 10 years with a very good success rate and at the end of the transaction I am told many times, that my skills and representation was well worth the cost of doing business, by both buyers and sellers.

    There are many aspects of the transaction that go un-noticed; negotiating, adhering to timelines; who holds the deposit moneys and are they protected; responsibility for accuracy in measurements, and the list goes on. Do your FSBO reps carry Error & Omissions Insurance? Can you get money from a stone if you the private buyer/seller are wronged? Maybe, but good luck.

    Here is basically a disclaimer from our local Maritime franchise:

    Who We Are

    ?????s.com is an advertising and marketing firm. We are not real estate brokers, real estate agents or mortgage brokers. We do not represent home buyers or home sellers. We charge flat fees for access to our services; we do not charge any commission.

    Take notice public….none of our business cards have this disclaimer plastered on it. In fact, I had to search for about 10 minutes to find this on their website. Sounds almost like the American drug advertisements to me.

    At the end of the day, the “commission” we charge is merely “Cost of Doing Business” and the ultimate goal is to be happy with the results when you walk in or out of the lawyer’s office.

    Be SAFE if you choose to go this alone. You do have options and my option is to go with the experts who carry a license to trade in real estate.

  45. Great write up! HOWEVER!! I work in the fastest growing city in the GTA and these FSBO signs are decreasing every month….and the signs that are still out are so old and rotten they might as well not even have one…NO SMART BUYER IS BUYING AN OVER PRICED FSBO!!!..

    Second! Dismantle MLS.CA and REATLTOR.ca These FSBO will go out of business even faster and we can move on with our Professional service once again…WE DONT NEED A LIVE MLS SITE TO THE PUBLIC!!!!!..We just need our back end in a virtual setting…BUYERS WILL HAVE NO CHOICE BUT TO USE A REALTOR!!!!

    • I agree the solution has always been to dismantle MLS.CA and REALTOR.ca that will end this internet pirating of our information and give us our profession back.

      Larry Matthews AMP DAC
      President/Broker
      Hants Realty Limited
      [email protected]

    • This is a great idea. Except we, realtors are the worst enemies to each other. Many top producers are getting lots of calls and clients through these websites.
      If these two websites were dismantled there would be new ones springing up and most agents would get on them.

      • Actually what would happen is agents would have to do their own marketing and cause their own exposure……OH MY.. the insanity!!
        That’s how it should be. rid us of Realtor.ca and the strong (10% actually producing in this industry) will grow stronger than ever and the hobbyists (90%) won’t last a month.
        Get rid of Realtor.ca

      • i smile at Luba, Larry,and Smart Agent… are you not aware that MLS.ca and realtor.ca are the exact same site.

        If not please know now that MLS.ca was renamed a while back to REALTOR.ca to more closely follow the American counterpart REALTOR.com which is wholly owned in the states by NAR .

  46. Great interaction and stories
    If FSBO’s are not governed by the rules set in place by our real estate boards and the government then why don’t the bad guys just buy all their homes and land from them as they would not be required to fill out the Fin Trac forms ? Something must be done before it’s to late .

    • we notified the Competition Board about that and PIPEDA 3 years ago. I personally got a call from someone at the Competition Board asking what FINTRAC was and saying the Privacy Act and PIPEDA didn’t apply to them.

  47. Great article, but anyone hunting FSBO know that by now. I dunno whats the fuss is about. Hey FSBO is a good way to drag out those on the margin sellers or those out fishing for price, unmotivated or undecided sellers. I take a leaf from whats happening South of us in much more open chaotic market then ours. FSBO as % of market even in a down market has gone up to 35% market share (NAR)where the listing to sold ratio on average on MLS is almost like 1 to 9. In Toronto GTA the MLS sale to listing ratio is almost 1 to 3. Most FSBO’s go with an agent eventually, the timing may differ according to local market conditions. Many FSBO, I have dealt with, have poor impression of realtors, partly due to poor servicing…FSBO website are sweet talking ramblers inducing these shy or stubborn marginal sellers to play their hand. I say look at how many FSBO sign up with top producing realtors… that should teach us something.

  48. Great letter and comments….the public needs to be protected from the realtors… Maybe we realtors should be protected from Crea , Orea , and Reco….I think it’s high time some organization funded with our money actually represents our interest !!!! That would make sense to me…got to go…

    I am going to take my ford pick up to the local dealerships lot and put my private for sale sign on it. And see how long it stays there …hey that would e illegal…no we realtors allow it on our lot Mls.ca

    • Isn’t that the truth! Or how about Shoppers Drug Mart put their stock in a Rexall pharmacy and tell Rexall how they will market it, and make Rexall tesponsible for any problems incurred by someone who buys Shoppers product in a Rexall store. Sounds absurd when you put it that way… But somehow the boards and directors who were supporting us as Realtors made sense of it! Agreed… Time to get proper representation from the people we pay to represent us.

  49. Good discussion starter here. Thanks to those of you who have presented your views in a constructive non-abusive manner – as so many of these conversations seem to deteriorate rapidly! I think we are stuck with the FSBO companies now, but the challenge is not to berate them but to improve our value to the public. And I believe it is just a matter of time before a FSBO transaction goes badly off the rails before some governing body or other gets around to addressing some of the issues raised here, ie agency, accountability, slander, ethics, etc.

    • FSBO transactions go of the rail all of the time already. The reason we don’t hear about them is that the consumers have no one to turn to for help. They can’t report to RECO or sue a agents insurance company for damages.

      FSBO deals gone bad require everyone hiring lawyers, if they can, proof of what was said (with no impartial witnesses available}, time and money…. and in the end most settle quietly so they don’t have to paytheir lawyers more than the problems are worth.

      The aren’t advertised as everyone is too embarrassed to tell their friends what the experience is like.

      Any they pay or they endure but they get very little satisfaction.

  50. I am with you regarding these fsbo companies.. However, these sites are a good source for contacting high qaulity leads. No need to search the newspaper or buy fsbo leads anymore. This is great!
    Good article.
    Cheers,
    Charles

    • Hi Charles,

      The problem is that if you go after FSBO’s who are listed on MLS you’re not allowed to contact them as per the real estate rules.

      JC

  51. When one of my kids gets a cavity, I take them to the dentist, not the the person who loves dentistry and could ‘sort of guide me in taking care of my kids teeth’
    Sorry, for those who have no respect for our industry, they must certainly have not worked it full time. I understand that those who just merely hold a license and get business from friends and family to afford them the next vacation have little value in any of their opinions.
    FSBO should not have access to MLS, thats the end of it. We pay for it, maintain it, created it, and the focus should be in getting ALL realtors to work full time or let go of their lincences.
    Of course, TREB and RECO would lose some money there…

  52. If a company is listing a property on REALTOR.ca as a mere posting then the Broker has to abide by the rules set out by all three Board levels but does not have to provide agency.

    The fsbo company themselves are just marketing companies that are offering advice on staging and can provide pricing tools through the licensed Brokerage they’ve affiliated themselves with or own like comfree and common sense. There is gray there but they fully within the rules and doing nothing wrong as some might suggest here and we cannot ask Canadian Tire to get a real estate license to sell a sign or a stager to get licensed to stage.

    Our industry has gone through, or is going throught, the most significant change in our history and we’re more than able to emerge stronger than ever before. I suggest to our industry members that we stop worring about what they’re doing right and focus on what we’re doing wrong.

    • Hi there HWR:

      I ask you with all sincerity, what in your opinion are ‘we’ (traditional ORE members), some, many or all, doing wrong regarding your last statement in your above comment. Then I would ask you to determine what it is that is being done wrong applies to, Realtors’ interests, or consumers’ interests.

      Based upon your posts thus far, I believe that you have answers to these two questions.

      Thanks,

      Brian

      • ‘Whats we are doing wrong’ could be that most agents think its only about commission and price. FSBO already know that, they do not see any value of service and all the other skills we bring into the table because we often neglect to talk about it and just focus on commission/price aspect. For instance ask a FSBO about security when unverified strangers adults enter their home to see it or how to qualify buyers or accident insurance or fire sale low ball offers. Ask them what are the pit falls of non disclosure? Title insurance what it does not cover? The standard response is that’s the lawyers end, they should cover that stuff!!!! And yet we know what happens in realty reality.

  53. REALTORS have an ethical responsibility to verify the accuracy of information on properties they list for sale.

    Check out this disclaimer on a sell it yourself style website:

    “PLEASE NOTE: Our listings are maintained by home sellers. Our sellers are generally pretty honest and well intentioned folks but we can’t guarantee the accuracy of the information on this page. If you’re interested in this property, please ask lots of questions and independently verify the information in this listing.”

    • Ray:

      Didn’t you leave out the completion of the last sentence in the disclaimer?…

      “…please ask lots of questions and independently verify the information in this listing…because we didn’t, and we don’t give a f*** anyway.”

      Whoops!…Is my language offensive to some?

      Imagine, the arrangement of letters forming a word being more offensive to some than the thrust of the idea behind the thought.

      Bizarre.

      • Brian they don’t care because they’re not providing agency to either party, nor do they care. Their market share is increasing and consumers are more confident than ever in being able to do it on their own. And because our house is in such a mess and with sooooo many REALTORS who have failed to provide proper agency, consumers feel they’d rather run that risk than deal with, what they perceive to be, unethical, self serving and overpaid REALTORS. We can bitch about it all we want, but that’s not going to slow them down or stop them from trying to improve their value and position amongst consumers. So it’d be nice to come on here and see someone telling us about how REALTORS could improve their value and position.

        Part of that btw is a united industry right across the country and improved training and mandatory ethics courses along with stiff penalties. How can we understand what is right or wrong if we are not taught the rules?…yet so many feel this is just our Boards grabbing our hard earned dollar.

        Brian you’ve said we need to clean up the industry as well. The best way to do that is through increased competition. Watch over the next five years as more and more of us lose business to large by owner companies like comfree-who is a Quebec company by the way. Imagine that! Quebec is the first to bail from organized real estate and a Quebec company is taking care of the rest. Viva la Quebec!

        • Quebec boards are organized real estate as will be the new provincial organization that does not require its members to join CREA or participate in REALTOR.ca. you are telling people to accept change so it would be nice if you also respected this change.

          They will have MLS services but under a new name as MLS is a trademark. The public will not have access to it so there will be no hue and cry to get FSBO’s on it, and if a FSBO is on it it will be listed…which by definition is not a FSBO.

          Large franchises such as Re/Max and Century 21 will have their worldwide sites and Royal Le page in Canada as well as access to sites they have aggeements with.

          An interesting point is that the information on the Board sites can be deemed ‘proprietary industrial information ‘ which cannot be required to be made available to every Tom Dick and Harry.

          So unless Com free licences its members, which I have heard it is doing, they will not have access.

          What can you offer as a FSBO company under these circumstances.

          In a Buyers market history shows sellers turning to experienced agents…. and for those of you who havent been in the market long look up an old FSBO company called PEACHTREE, better still talk to its owner who left that concept behind.

  54. Thank you, Michel, for your timely REM post.

    Most important piece of information is stated in current post by HWR when he or she states: “Truth is the fsbo industry is not subject to our rules but they are selling homes.” I don’t know if they are “selling” homes, but they are certainly participating in the “process,” but there is no policing their activities, apparently.

    For all intents and purposes, the people you note appear not to fall within the jurisdiction or guidelines mandatory within the RECO, Michel. Therefore, the expansive thinking might lead one to believe therefore, that the FSBO companies are not governed by REBBA rules and regs, either. Because the two watchdogs are joined at the hip.

    There seems to be plenty of real estate business being conducted by people who are not licenced, whether the moniker FSBO applies or not, right across the country. Not the least of which advertising the numbers of transactions they have participated in the consummating of, as you so noted, Michel.

    So, where are the controllers that speak to this topic? It would be a total waste of registrant’s time and any reader’s time to try to involve RECO. This simply does not fall within their arena, apparently. And, if in fact that is true, then who “is” the monitor, the governor overseeing their activities? If there is none, then who in fact, IS really protecting the public? And under what actual title does this subject fall?

    We sometimes tire of hearing how REALTORS® at large are the bad guys, while unlicenced operators appear to be driving the success-bus, providing the public with abusive doctrine as to how the homeowners should not be using the services of ‘licenced’ (registered) REALTORS® but rather should be looking to the unlicenced experts to bring them Buyers and Sellers, often alluding to that no “expertise” is required to buy or sell real estate – that easily enough, “anyone” can do it. And they do.

    Personally I don’t think this situation is necessarily being driven by commissions, not so much. It’s rather being driven by the would-be further dismantling of the industry as we know it, by the dissemination of false doctrine: advertising methods; once again in the new world order, who is the boss over such things, if not RECO and or REBBA?

    The Ministry perhaps needs to address this topic at the grass roots level. It is nothing to do with ‘competition,’ and opening the field. It is ultimately about misrepresentation to the public at large, as to their (the public’s) rights and that they are being mislead through false advertising. Not unlike many scams, everything from snow-shoveling to helping the poor and distraught in other nations, and people door-knocking and phone canvassing to help you save dollars on gas and hydro bills. Only later do you learn that you’ve been duped, when you find yourself ‘paying-twice’ perhaps. So what, in fact, did you save, in the end?

    Respectfully,
    Carolyne L
    http://www.Carolyne.com

  55. The fsbo industry has proven to be very adaptable, taking advantage of opportunity as it presents itself. It clearly understands who its target market is and goes after it. And every year it continues to grow. A large portion of our industry however refuses to adapt. Refuses to listen. Refuses to move forward. We now, as one contributor suggests, now require government intervention! The thing he complains so much about.

    Truth is the fsbo industry is not subject to our rules but they are selling homes. Not as many as we are. But as we sit and gripe and scream about how we deserve more money, they are looking for better ways to serve the public and better ways to improve their clients ability to sell. And the bigger they get the less relevant we get. The complaints in this article have no ability to stick except with those who insist on doing nothing different.

    Times have changed-we better too!

  56. Michel:

    Sadly, it seems that the public enjoys being mislead by the FSBO industry, in that the public wants to believe whatever it is that the FSBO types tells it when they coincidentally slam Realtors. That seems to be all that the public cares about any more. We have brought this upon ourselves with our ambivalent attitude about our own governance structures/behaviours and we only respond feebly to outrageous CREAcrat decisions (which definitely do not reflect ‘our’ decisions) after the fact. We get what we deserve by default.

    The FSBO guys are utilizing slippery tricks that Realtors should/would be held accountable for. CREA opened this one way door to the FSBO crowd, against the wishes of the very vast majority of its paying supporters. Therefore, CREA, that wise, forward looking brain trust, is responsible for this unravelling of its own in-house system designed to at least ‘try’ to avoid the pitfalls that the public ironically is now up against, these brave new world days, when it chooses to deal with the slick and fast marketing boys posing as Realtors.

    Sadly, you can’t fix stupid.

    Government intervention may now be the only answer going forward.

  57. Great article! Before I say this, I will say that I have no issue with these companies. Real estate is a competitive industry where competition is good for the health of the industry as a whole. But when one of them becomes a licensed brokerage then they should be playing within the same set of rules as we do.

    One of the larger FSBO companies that became a brokerage in Ontario recently requires clients to agree and HEREBY enter into an exclusive listing on their website when they collect payment for the non-MLS FSBO services.

    How is it compliant with the RECO code of ethics. Sec 11 Contents of Written Agreements – There is no start and expiry date. There is no mention of the money being paid to a cooperating brokerage even if it is nil. How about the requirements under Sec 10 Information before agreements. Where is the discussion about agency before the consumer agrees to this? Is this acceptable under the act?

    As well, as the article discusses, how much of the activity is being done with non licensed people in a licensed brokerage that requires a person with a license to be providing it.

  58. So impressed to read this article. As a newly licensed Realtor I hear the objections to working with a licensed Realtor as opposed to these FSBO companies frequently. Nice to know there is a voice to bring this issue to light! Well done!

  59. Very good article. First of all; Can I as a realtor, make it a bit more brief and mail it out in my farm?
    Second; Since many of their allegations are they are who they are as you state, how come us as realtors don’t sue for slander and many other things?
    Good article I am glad it’s written.
    thanks
    Sandy

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