Part 2 of a two-part column about commissions


In Shakespeare’s Julius Caesar, a line from Caesar to Brutus went something like: “You cannot hide yourself from the truth.”


If you’re bent on some new twist on promotion and advertising of your services, ensure that you comply with real estate regulations by explaining in detail what your specialty or special services are.  As an example, if you are going to be guaranteeing a sale or giving a special break on fees, then you MUST SPELL IT OUT in detail in writing.  And ensure that the consumer/client has a legible copy of your promotion/service.  To avoid future issues with governing bodies, a registrant (in Ontario), should seek the counseling of his/her manager.  “In case of fire, break glass!” is something that you will not have to use if you will listen to these words! 


In Ontario recently, all registrants have been sent Introducing REBBA 2002.  It is even accompanied by a CD with pertinent issues and guidelines.  Many of us will simply ignore this monumental effort and continue to ask our broker about the new guidelines.  It is up to all of us in every province to keep abreast of the rules and regulations. If the Auto Licencing Act changes and you haven’t kept up with the rules, can you say to the officer who is charging you for some violation or other: “Gee, officer, I didn’t know the rules changed!”  How far do you think you would get in front of a judge?


Does charging the public less than what you would deem fair diminish our profession in the eyes of the public and ourselves?  The public has been in the same mind-set for years: What’s in it for me?”


Over these many years, I’ve drilled into agents’ heads that it is not just the one commission that we have to be interested in, but it is in the future business that we have to earn.  Does this work all the time? Of course not, but it’s really worth the try. So, get into the consumer’s head and tell them, “Here’s what's in it for you, if you will work with me on my terms and conditions.”


Now, at this point in the month, I must confess, that I am only 3/4 of the way through the new Act.  (Well, I was away in Mexico for two weeks – where, by the way, they get eight per cent on sales!)  But, with any luck at all, I should have a handle on it by the next time I write to you.


So, nothing is new in the fact that there is continuing pressure on commissions. There are so many variations that both brokerages and agents alike are becoming involved with, that it makes my head spin.


What is happening as a result of the downward pressure on commissions insofar as the brokerage is concerned?  Less gross commissions coming into the brokerage equals less operating capital and less profitability. Is it any wonder that brokerages from Newfoundland to British Columbia are seeking ancillary services to prop up their income? The smaller brokerages, in the end, will suffer more, as the discounters continue to surge ahead into the 2000s. The larger brokerages will seek to increase their agent count in order to achieve greater volume of sales.  Will service at both ends of the spectrum suffer?


I have been so frustrated trying to reach some of the discount brokerages in the Toronto area.   They are so busy getting listings that either they have a call centre, or agents who are so busy running around that they have no time to call our agents back!  We, like other brokerages, hear from unhappy sellers. Then they call us when their listing is up and they list with our brokerage that the agent listed the house and they never heard from him again. 


Here’s a question to ponder: Can an agent who drops commission in order to beat out his colleague be a good negotiator at the table?


As I stated at the outset of this article: Sell yourself for all you’re worth, and then add some extra value services that the competition wouldn’t even think of offering at their reduced commission.  If agents look at the commissions earned as an annuity to come from that buyer, wouldn’t that change the composure of the industry?  Because, I believe that many agents are in this business for the short run and not the long run.

As Martha Stewart would say, “It’s a good thing!”


I would like to hear from you in respect to this article or others. Older articles are archived and can be retrieved by going on REM’s website at


Thought for the month: “If you have not experienced failure lately, you have not been challenging yourself enough.” – Pinball Clemens, Toronto Argonauts


Stan Albert is celebrating his 35th year in real estate, and is a committee member with TREB and RECO. He is a registered trainer/consultant, and is now in his ninth year with Re/Max Professionals in Toronto. Email s[email protected]; (416) 232-9000.

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