Carving the cartel


The cartel's HQ in Toronto.

About twenty years ago I coveted my neighbour’s property.

So, I went over one day and took with me an offer to purchase which I’d typed up. And a cheque.  She accepted my lowball offer for two reasons – I let her live there for free for a considerable time; and she got to sell it without any showings, no sign on the front lawn, no salesguy hanging around from 2 to 4 on Sunday afternoons, no need to endlessly vacuum, no uppity buyers judging her furniture (pretty bad) and, above all, no commission.

One day, also years ago, I drove to a suburban Toronto hotel to be guest speaker at a real estate board luncheon event. During my talk I made the point that commissions were negotiable. At the time the Toronto Real Estate Board had a carved-in-stone 6% policy which, I pointed out, was not backed by any force other than their own power as a cartel. In reality, a seller could insist on any damn rate he or she wanted.

And for that, I was bunned. Whole wheat, crusty white ones, round ryes – whatever was in the breadbaskets on the table found their way through the air, and in my direction. It was a moment I will not forget. Monty Python would have been proud.

For decades now, real estate boards have sought to absolutely control the sale of property. In the process, they’ve grown large, powerful and relatively wealthy. I’ve sat in the inner sanctum of boards in Vancouver, Calgary and Toronto, and you can ascertain in a flash these are big businesses. In Toronto, for example, the president of TREB, elected for a one-year term by board directors, has a personal staff, opulent office, lavish perqs and high media profile. It’s a good gig, thanks in large part to a money machine known as the MLS.

The Multiple Listing Service is a closed-end marketing scheme which aggregates all the available properties in a geographic area. Since going online a few years ago, it has turned into the preeminent tool for both sellers and buyers as 80% of all previewing of homes now happens digitally, instead of sitting in the back of a realtor’s Acura. However, the cartel has restricted access to MLS to agents who are board members, and to homesellers who have signed a contract swearing they will pay a commission to an agent, regardless of how their sale happens.

Until about now. Canada’s competition watchdog has told CREA its actions unduly restrict consumers from buying and selling in an unfettered way. Which, of course, is absolutely true. These self-dealing practices have engendered much of the realtor hatred you can taste every day on this blog. Change can’t happen soon enough.

So, soon you’ll be able to send an offer for a house directly to the seller, regardless of whether he or she has an agent or a listing. Real estate agents will probably turn into marketing consultants, charging you a flat fee instead of a colossal commission. Sellers will be able to include their name, phone number and addy directly on listings, so potential buyers can make an offer by email if they want. Individual sellers will get access to MLS so, for a fee, they can upload their property data and have it exposed to tens of thousands of home shoppers. This also opens the door for online competitors, like Zillow in the States, who augment listings with tons of neighbourhood info, interactive maps, aerial snaps and even data about local climate and crime.

So, what will this do to the market?

Obviously democratize it. Never a bad thing. But it’ll also bring more volatility, less predictable patterns and a lot more emotion into the process. Without the benefit of a realtor giving a dozen comparables, and the reasons behind them, sellers will probably ask for the moon. Without an experienced person telling a bidder how to construct an offer that protects his interests, the chances of wandering into a lawsuit blossom. And with potentially thousands of private sales, a chunk of the market will simply disappear from the public eye, skewing stats.

Still, this is big news. Like the end of OPEC. Or Gary Bettman.

Best of all, no more buns.


#1 Ted on 11.02.09 at 10:55 pm

Inexpensive chaos, or organized real estate. At least now everybody will have choice and all the bitching should end

#2 Kurt on 11.02.09 at 11:10 pm

“But it’ll also bring more volatility, less predictable patterns and a lot more emotion into the process. Without the benefit of a realtor giving a dozen comparables, and the reasons behind them, sellers will probably ask for the moon. Without an experienced person telling a bidder how to construct an offer that protects his interests, the chances of wandering into a lawsuit blossom.” That sounds like an opportunity for a good agent to add value for both the buyer and the seller. Maybe we’ll see fees reflect the value add of individual agents, rather than a flat rate for merely showing up.

#3 Dan in Victoria on 11.02.09 at 11:25 pm

Yeah,sounds like Monty Pythons version of a midnight showing of Rocky Horror Picture Show,with the toast throwing,etc.
Looks like the pendulum is swinging the other way for the realtors.Hmm….that reminds me of Edgar Allan Poe….
A lot of novice buyers/sellers are going to get in trouble with poorly written contracts.

#4 InvestorsFriend on 11.02.09 at 11:31 pm

Yup, a Cartel waiting to be busted…

Why should Real Estate agensts make windfalls gains when house prices are higher? Is it really moe work to sell a $500k house than a $250k house?

It reminds me of our silly “rule” for tipping in Canada where the restaurant industry tries to convince us all that we are cheap if we don’t pay a flat percentage of maybe 15% (or10% or 20% or whatever). I guess waiters who carry more expensive food should get paid more, just like real estate agents get paid close to twice as much when the house price is twice as much.

Neither the Commission nor the tips really make any sense and are just bad habits.

#5 EJ on 11.02.09 at 11:44 pm

Huh? What? The government making a decision in favour of public interests? Am I dreaming?

Well, it hasn’t happened yet, so that means there’s still time for the CREAtins to lobby/bribe/coerce the watchdogs into backing down. If this really looks like it might take hold, be prepared for the mother of all TV, radio, and newsprint advertising campaigns masquerading as “public service announcements” telling people how bad this will be for them if it passes.

If you find those Local TV vs Cable Company browbeatings you’ve been seeing lately to be very frequent and annoying, you ain’t seen nothin’ yet.

#6 Jonas on 11.02.09 at 11:50 pm

Now this is good news and about time… Garth you are a glimmer of light in an otherwise pathetic landscape of lunacy. Now maybe Can West, or what’s left of it, can no longer be coerced into those well thought out “15 Myths of Vancouver Real Estate” in which the local “experts” (agent, developer and CMHC flavor of the week) that somehow garnered front page status cleverly followed with a smattering of full page condo ads, hmmmm. Now maybe real estate agents and their grueling five week course certificates that somehow earn them self professed “professional” status will be paid a fair price for digging a hole in your front lawn and printing a 2 page form off the internet which in my mind is about a hundred bucks. How much does one of those post digger thingys cost at Home Depot anyways? Hell, I could dig those little holes and tell all the buyers ” you better remove those subjects buddy”. How hard can it be? Today the CREA… tomorrow CMHC!! hey… a girl can dream.

#7 Ulsterman on 11.02.09 at 11:52 pm

This is about time. In the UK standard rates are 2.5-3%, but sub 1% rates are achievable for online, bare-bones agents.

#8 Steve on 11.02.09 at 11:52 pm

Garth…faithful follower. Come on. Please be a bit more consistent. Starting to lose faith.

Yours Truly,

Big Banker

#9 InvestorsFriend on 11.03.09 at 12:01 am

And there are lots more monopolies in Canada.

In fact I bet our “free market” has more monopolies than your average board game section at a toy store.

Let’s see, where to start?

What group shall I anger first?

How ’bout Dentists who supply manage their numbers and seldom compete on price. They even used to have standard fee guides.

Maybe lawyers too, but I am not as familiar with their supply management and fees.

How ’bout Airports? They charge Airport Improvement fees on every ticket. They also charge hefty landing fees to the Airlines. Airports build fancy terminals and parking garages while the Airlines themselves are usually nearly broke. It’s nice work being a monopoly.

How ’bout unions? they force employeees to pay their dues whether they want to or not and then bargain as a group and threaten strikes. So we get garbage men making far more than they would in a free market. Is it necessarily a bad thing? That’s hard to say, but the union does beome a monopoly. If the City wants to hire a garbage man they deal with the union as far as wages go. Same for transit drivers and on and on.

And of course the entire government at all levels is pretty much a monopoly. (Just try paying for an H1N1 shot, no way, you must deal with the monopoly.)

Cable T.V. – yeah sure you could go satellite (in Alberta Shaw owns both the cale and one of the two satelite companies). And don’t try paying a U.S. provider for satellite, that is illegal even if you pay. Yes, again being a monopoly is a nice business. CRTC used to regulate cable bills, but no more. (mine’s gone from $25 to $90 in the last 15 years, yeah with lots more channels but still!) Luckily I own some shares in Shaw.

In fact my favorite investments are unregulated monopolies.

How ’bout Visa and Mastercard? You as a customer get to choose from any number of cards, but Merchants have no real choice but to accept these cards and pay fat fees to Visa and MasterCard. The actual Visa and MasterCard companies do not take the risk that you won’t pay, their member banks take that risk, they just collect their monopoly fees. Sweet.

Some monopolies like Electricty distribution and gas distribution are monopolies but are regulated as to the price charged.

Microsoft became a monoply simply by dominating an industry. Once most people started using their software, a competitor coming in faced a challenge about as easy as trying to introduce a new spoken lanquage into a country.

How ’bout the QWERTY keyboard? It’s a monopoly too, but luckily no one owns the patent.

Google grabbed a monoply in seach engines. Nothing really wrong with that? or should they be regulated?

So, there are lots and lots of monopolies in Canada.

Still much of the economy is competitive. And that is a good thing.
Long live real competition.

#10 Watched Bubble Never Pops on 11.03.09 at 12:02 am

This is an amazing development. Having said that, I’ll believe it when I see it.

#11 Shaun on 11.03.09 at 12:06 am

Did you seriously get bunned? You can’t make stuff like that up! I can’t imagine, a bunch of suits throwing buns.

#12 Nostradamus jr. on 11.03.09 at 12:07 am

Unfortunately for all the Renters who follow this blog…reducing and allowing for more competitive R E Commissions will cause overall R E Prices to maintain their rise.

…Its really very simple should interest rates double from current ones….homeowner families will have to double up as will renter families.

and on the Wet Coast…both types will need to triple up.

Nostradamus jr.

#13 Devil's Advocate on 11.03.09 at 12:20 am

Do my eyes deceive me? If an intelligent guy as you Garth does not see the ramifications of this stories unfolding with success in favour of the bureaucrats then there is little hope for our nation as we head yet further down the path far past socialism toward fascism.

This would be like the government stepping in and actually taking over FORD because they did not take any bailout money and actually showed a profit in spite of it. The MLS® is a private database system created maintained and supported by CREA.

No one is pointing a gun to your head and telling you that you have to use the MLS® and a REALTOR®. Yet better than 95% of buyers and sellers do willingly do so. Why do you think that is?

Think about it… and then think about a government run MLS®. How long then after before you are told what the maximum you can ask for your house is? It’s a slippery slope my friends… one you may regret having sanctioned.

There are close to 70,000 REALTORS in Canada more than half of which are in Ontario alone. They each compete with one another for your business. How possibly is that not a competitive free market? Throw it in the hands of Government and it won’t be. Right now you can buy or sell real estate privately if you so choose to. Will you be able to should it ever become a government run MLS®? Or will they force you to do so through their regulatory services so that they can control and massage the economy in ways they see fit, at your expense but to the perceived betterment to the whole? Things like price controls? They could heat or cool the market directly and instantly by raising or lowering prices instead of enduring the inherent lag of tweaking interest rates.

It’s a slipper slope folks, a line in the sand, the momentum of the pendulum. Be careful what you hope for you might just get it and a whole lot more. Screw this one up and there will be no going back. Remember 95% of buyers and sellers employ the services of one of those 70,000 professional REALTORS® who each compete with one another for their business and then collectively collaborate toward getting the job done. When you employ one REALTOR® you are employing up to 70,000. And THAT is the success of the MLS system… REALTORS® working co-operatively to get YOU where YOU want to be. It’s ALL about YOU. Freedom, liberty and democracy… you choose.

#14 random guy on 11.03.09 at 12:20 am

no matter how you look at it, unless you’re a realtor of course, this is fantastic news.

the real estate industry needs to move into the twenty first century, whether realtors like it or not.

#15 conan on 11.03.09 at 12:29 am

If you instantly find the perfect house for yourself or if you sell your house to the first potential buyer then the idea of using a sales agent is absurd.

However in the real world it does not work this way.

I think RE agents will allways have a place in the market.

#16 Chaostrology on 11.03.09 at 12:34 am


It’s about time. In different century, half a life ago, I thought maybe I would be a good realtor, (what I really thought was how much I would really enjoy making all that easy money) I had a big car, a gold jacket, business cards with my ever so young face on them. My luck was to parachute right into the hottest sales market of all times with rates that eventually reached 20%. People were lining up on the streets outside of listings bidding prices up, (sound familiar) most agents didn’t even submit their paper work for their MLS property for the first 4-5 days as they were practically guaranteed to close both ends of their deal and thus reap all of the commission. Realtors aren’t really bad people, they are just avaricious, prevaricating sociopaths.

I lasted a week (it’s funny now). I knew it then and I am just as certain now, that if you are going to call yourself a professional, you don’t work on commission and you can’t play both sides of the fence. If you are indeed a professional, you may charge a reasonable fee for your services regardless of the outcome. If you do indeed possess special knowledge and skills, then they are valuable and do not need to be hidden in an MLS agreement.

Also the buyer should be able to purchase some representation in the process. Many purchasers do not know that under the law of agency, all parties that share in the sales commission offered by the vendor, must do everything in their power to represent the vendor. This leaves the poor buyer out in the cold, as in reality his representative in the process is working for the vendor. How the heck is the purchaser ever going to negotiate a great deal when their valuable, knowledgeable “professional” only gets paid when the vendor sells his house.

People, you need to pay for knowledge and experience, in the end it will save you money. I mean really, do you think your “professional” that’s working multiple other listings give a crap about you? They’re just playing the odds.

With the presence of the internet, the biggest marketing tool in the world, the monopoly can be broken.

Realtors are partially responsible for driving prices higher. Every time prices go up, they make more money! Time to be rationalized. Relax, it’s a day at the beach.

No soup for you. NEXT.

#17 Jon B on 11.03.09 at 12:37 am

Agreed, change can’t happen soon enough. The cartel must be dismantled. Sellers and buyers must have alternative ways of hooking up. I sold my first home privately and saved a nice wad of cash in the process. It seems to be only the lawyers who produce the documents that have any real function in a real estate transaction.

#18 Happy on 11.03.09 at 12:38 am

Real estate sales people out of work.

So, the question is:
Where will they find work in tough economic times ?

#19 PropertyGuy on 11.03.09 at 12:43 am

I sure would not want to be an agent that just signed a 36 month lease on a new BMW this morning and then hearing this story on the radio.

But alas – real estate will continue to trade hands, as it has forever Homes will continue to sell for what the market can bear, not what someone tells you it is worth (and tack on that 5%). Professionals like home appraisers will continue to assist lenders (and sellers) in determining value. Private sellers won’t be mugged by some stranger that posed as a buyer, tied the family up and stole all of the money under the mattress.

And stats won’t be skewed with organizations such as MPAC who currnetly track sales data in Ontario. They might be encouraged to make it readily avalable (as they already do) for a small fee – much less than 5%.

If a good agent can convince sellers they are worth 5% – so be it, the market will decide. But gone will be the days when the part timer at Sobeys makes an extra $15k in a weekend selling homes on the side as a part time agent.

The Re/Max’s of the country are going to have a hard time keeping bums in the seats of their fancy offices @ $1200.00/month apiece when a seller can sell the home themselves for a few hundred bucks.

As Garth often says – “this won’t end well” (for the CREA)

#20 Alberta Ed on 11.03.09 at 12:51 am

About EFFING time.

#21 Happy Renter in North Van on 11.03.09 at 12:59 am

I’ve been looking at the G&M and the Toronto Star for reaction to this story. I’m amazed real estate agents somehow believe the disintermediation which has happened in the equities and travel industries would somehow never affect their monopolistic behaviour. If you don’t provide added-value to the transaction, your industry, you are just a commodity. Wake up Real Estate Bitches, it’s the 21st Century…

#22 andy burgess on 11.03.09 at 1:01 am

this is not RE related but interesting stuff.
Pols paycheck & middle class.

#23 Calgary real estate on 11.03.09 at 1:04 am

I totally agree with this. The Globe and Mail did a great job covering it as well. There needs to be more access and more choice for sellers to showcase thier properties. Canada needs to go more the way the states has in the open availability of choice for sellers and buyers alike.

#24 Crash on 11.03.09 at 1:09 am

I can’t help but think that sometimes the devil you know is better than the devil you don’t know.

#25 kansai_92 on 11.03.09 at 1:13 am

Like my friend always says… the realtor doesn’t sell your home. MLS sells it!

#26 Bogdan on 11.03.09 at 1:21 am

I heard about this today. Big news indeed. I think it will take some time to get in place. I just love it, let the show begin!

“Obviously democratize it.” – I think I hate the word in the middle and I think it’s not suited to the situation. You know… you could use republicanize ;-)

#27 Patsan on 11.03.09 at 1:28 am

Aussie Bank just raised the rate by 0.25 to 3.5%. A BBC analyst says that they expect another lift of 0.25-0.5% next month. Merry Christmas, eh?

#28 freedom_2008 on 11.03.09 at 1:45 am

We have just sold our house recently without realtors, without sign, or any ad cost. The listing was posted on craigslist and usedvictoria. Within 2 days, we got more than 30 inquires. We chose 12 of them to view our house and got 6 offers after 7 and half hours showing time.

We did consider to list the house with a discount agent (for about $6000 flat fee) first, but figured that besides a mls number and a sign on the lawn, there is not much to it. Other agents wouldn’t want to bring their clients in since they wouldn’t get big commission, plus the listing agent has little time for ours since he has 20 other listings.

So we decided to try it ourselves and got the price higer than asking, and beat what the agent would list for.

It is not easy to handle multiple offer case, but there are lots info online with all the details to follow, as long as you are careful. The most important thing is to be open and fair to all the buyers (we told buyers to add house inspection into their conditions even when some of them wanted to skip it). At the end, we and the buyers are both happy, and those didn’t get the house felt fair about the process as well.

We do think that realtors should not charge that much fee (in BC, it is 6% on the first 100K, then 3% on remaining), or the fee should tied up with how much work they did in the house sale. We also do wish that more realtors put their clients’ interests first, buy or sell. But sadly, just like the profession of financial advisors, very few agents could do that.

#29 G. on 11.03.09 at 1:52 am

Can you get the CRTC under that umbrella?

#30 Anon - GTA on 11.03.09 at 2:01 am

Last week I noticed that Google maps now has real estate more option

Just google for ‘google maps real estate’

#31 Mark on 11.03.09 at 2:17 am

Since the CMHC and the banks will be big customers of the RE industry in the future to liquidate the properties they seize — its good that they’re breaking this cartel up.

But kind of sad that it has taken this long to break an obviously illegal scheme in restraint of trade.

#32 Bobby on 11.03.09 at 2:30 am

This is great news! It will bring some integrity to the market and agents will now have to offer better advice and quality of service for their commission.

I for one have bought and sold a number of properties and can honestly say that only in a few instances was the agent remotely worth their commission. In fact, in a few purchases, the agent just got in the way.

Gone are the days when an agent will get the listing and then just plunk a sign on the lot and wait. They will have to work for their fees.

The better agents will now charge a fee for their services and will still continue to thrive. They will continue to be in demand. The weaker agents, those who just passed the course, will be looking for something else. Maybe selling cars. Oops, that industry is changing too. Back to waiting tables.

#33 Future Expatriate on 11.03.09 at 3:40 am

Sellers can ask for the moon all they want.

And never get it. So those who want to pretend, will be able to pretend and sit with a “for sale” house for 5-10 years or more.

Besides… the turnaround is just around the corner.


#34 JoeCalgary on 11.03.09 at 3:54 am

So, what took the competition watchdog so long?

#35 Mike (Authentic) on 11.03.09 at 4:09 am

This is bloody awesome news! It’s about time too. Score a big one for the home owners and home buyers out there on their victory over the evil Canadian REB empire. Let the trumpets sound, the children run free and money rain from the sky back into the buyer/sellers pockets!

We sold our house with FSBO and it wasn’t hard at all. The CREB scaremongers sellers into thinking you can’t sell something you own and you’ll mess up. It’s not only super easy (lawyer does it all!), but also vastly cheaper too ($900 vs $37000 for us).

The Welists, Comfree’s and other FSBO sites have great documentation on how to sell your home, proper paperwork and documentations and all you have to do with them is get a lawyer to check it all over. Then it’s done.

Victory to the people! Down with the CREB tyrannical ways and unjust commissions.


#36 NOBODY on 11.03.09 at 6:35 am

The CREA et al are a thing of the past.
There are so many internet based real estate companies now that will charge next to nothing to advertise…
COMFREE.COM is huge now out west. $700 to list & they supply the legal guy.
A friend of mine sold in days in a private sale at FULL asking.
Why would I give 5% of my hard earned money to some clown that know crap about the market?

#37 Matt on 11.03.09 at 6:47 am

It’s about time.

The MLS system and associated rules are one of the last bastians of “controlled markets” in our country. Let them go the way of full service brokers, used car salesman and other unsavoury folk who used information assymetry to their advantage against consumers and now have real competition.

Bring on discount brokers, self-serve real estate and Zillow Canada!

#38 Robert1 on 11.03.09 at 6:50 am

Now that Harper has debased the Beatles classic ” I get by with a little help from my friends ” can Flaherty and Carney chime in with a equally debasing rendition of the Carpenters classis ” It’s only just begun ” ????


” SYDNEY — Australia’s central bank hiked interest rates by 25 basis points for a second successive month on Tuesday, saying the improving economic outlook and expected growth in Asia justified the move.

Central bank governor Glenn Stevens said the bank had decided to up the official cash rate to 3.50 percent, its highest level since February………………..

#39 E.O. on 11.03.09 at 6:56 am

I can’t wait for MLS to be available to all! At the same time why in Canada has no one come up with another listing service similar to the one you mentioned in the US as competition? Any of the free online listing sites you can use are jammed with Realtor listings and don’t work that well.

#40 eddy on 11.03.09 at 7:04 am

Did I wake up in Russia? Anyone can sell privately for no commission, or set up an rival mls system for profit, go right ahead. this is another example of a federal government out of control. i thought there was an economic crisis and a opium war to fight, and they are paying bureaucrats for this? guess what, less Realtor income means less tax revenue for the feds. And More tax free profit for principal residence sellers! The same sellers who got tax credits to do the renovation! Wow great deal. suddenly the streets are paved with gold again! let’s recap- larger tax free gains, sitting under the nose of a tax starved federal government , hmm

#41 ca on 11.03.09 at 7:06 am

Garth –

While some think the US will inflate away its debt, others argue that it will default on its debt

How likely do you think such a default is?

Thank you

#42 David Bakody on 11.03.09 at 7:09 am

It appears your destiny was laid out many years ago … without the incident mentioned above and a host of others you have shared or we read about, you just would have been a faceless Sheeple in a field of wind swept rye crying out for help with a weak sound no one could hear.

Great work Mr. Turner …. hold your head high you paid your dues and won respect of many and the envy of others who are lost in the fields of rye waiting to ploughed under.

#43 Bill-Muskoka (NAM) on 11.03.09 at 8:02 am

Without an experienced person telling a bidder how to construct an offer that protects his interests, the chances of wandering into a lawsuit blossom. And with potentially thousands of private sales, a chunk of the market will simply disappear from the public eye, skewing stats.

Ah, I think you forgot the ‘other’ party always involved in RE transactions…LAWYERS! The lawyers do the actual transfer, not RE agents. Therefore, count on a fee of about $1000 to legal counsel. So much for the FUD approach Garth. Their legal rights ARE PROTECTED.

Now, when we bought our place the RE agent told us we were ‘forbidden’ to talk directly with the seller. I considered that a bunch os BS, yet complied. Had we done as I knew we should we would have had a helluva lot more information about things that we later discovered needed maintenance and information about other things.

My end feeling was, especially after having to agree to ‘guarantee’ the RE agent a commission (another bunch of CRAP!) is that the industry is totally screwed up and needs mandatory regulation and imposed changes.

BTW, we got more paperwork from the realtor’s office than we did from our lawyer. They inundate people with their self-serving warnings and BS.

A pox upon them all and their elite little cartels.
Apparently, so do a lot of other folks, including those in real power. I will never use another RE agent.

The people that make a transaction safe are the lawyer, the home inspector, and the Energy Auditor. Then there are the most important people of all…the BUYER(s) who has a brain, eyes, ears, and the ability to THINK.

#44 Bill-Muskoka (NAM) on 11.03.09 at 8:11 am

#18 Happy on 11.03.09 at 12:38 am

Real estate sales people out of work.

So, the question is:
Where will they find work in tough economic times ?

Merry Maids would be a good opportunity. Something they can probably actually be good at. Still working in the RE industry and sure to allow them to ‘clean up’ on every sale! ;-)

They may also find opportunity as ‘packers’ for moving companies! I doubt most would have the backbone to actually do the moving. That paperwork shuffling just doesn’t develop enough muscles where they are needed.

Next up for reality check will be investment advisers and those who have no real needed function in our society.

#45 Downbytheriver on 11.03.09 at 8:18 am

If there is a sharp slow down in RE sales, commissions will likely come down too. I remember in the 90s there were TV ads for RE agents undercutting their competitors on just such a thing.

While I dislike the monopoly they seem to have, the good ones do provide a valuable service.

As for the NHL, yes, sans Gary Bettman would be a beautiful thing.

#46 OttawaMike on 11.03.09 at 8:49 am

The competition bureau decision is good news. I have sold 2 houses privately and 2 with an agent. There are advantages to each method.
It depends on many factors such as the number of buyers available, time of year and the private seller’s closing skills.
One thing I have noticed is that private sellers rarely know the true market value of their home especially in a frothy market. To disagree with Garth, more often the private seller will under price their home as they do not have an ear to the market like an agent does.

#47 Confused and... on 11.03.09 at 9:12 am

The RE agents should start looking for a real job soon. Or may be they can retire after having made so much money off of us. I hope those professionals who turn RE agents can turn around, get out quickly and find something they are good at.
Just this summer I was involed with a sell/buy process for my friend who used the same RE agent. The guy made, in 1 month (that is how long it took, the actual time he was working may be was just 6 showings and some phone calls) over 10,000 grants.

Can’t wait for the cartel to be dismantled

#48 The Vulture on 11.03.09 at 9:14 am


I recently fired, with extreme prejudice, a real estate saleswoman for her habitual lying, hyper controlling nature, threats, bullying, greediness, argumentative nature, selfishness, extreme arrogance, laziness and lack of effort, failing to abide by her fiduciary duties to myself as her client, secrecy, lack of prompt and timely responses to my queries and lack of professionalism. She had a take it or leave it attitude at all times while dealing with me and would always talk down to me even though I could run circles around her knowledge wise. I always got the feeling that I was doing her a favour by doing business with her and that we were to do deals as quickly as possible so as not to waste her precious time! How arrogant!

I have since found a much better agent to help assist me in my continuing search for real property investments.

There are many agents out there. Don’t stay with a dud as you don’t need to. They work for you not the other way around.

I hate poor customer service! Always have and always will. Apparent lack of competition, in some instances, may lead to poor customer service and the taking for granted of one’s customer(s).

The funny thing is that the previous agent (all the classic personality traits were there), to the best of my knowledge, was probably suffering from a narcissistic personality disorder of the highest order.

#49 Kris on 11.03.09 at 9:18 am

Did you dodge all of the flying dough balls or did any of them hit the mark? I hope they weren’t buttered.

#50 miketheengineer on 11.03.09 at 9:25 am

Garth et al:

Australia, raised their rates today, I think by 0.25%.

Wonder if the price gouging Canadians will follow suit.


#51 Peter on 11.03.09 at 9:28 am

My freind just boght a new house in GTA, bungalow in Etobcoke area, paid in cash all the money he and his wife had – $ 620k; the house is pretty old, need renovation. They took line of credit $ 150k to do all the renovation.
So far both of them are employed with total income $ 110k. The money they had are from selling property in the country the couple came from.

GARTH, is my freind greater fool?

#52 The Vulture on 11.03.09 at 9:32 am


Garth, lucky for you that you were not in the Middle East.

In Iraq they throw shoes.

Just ask George W. Bush.

If a shoe that flies your way is; all leather, hand made in Switzerland, get the guys name and phone number…he is worth suing! Probably has a trophy wife and cottage as well. Get greedy and grab all you can get.

Here comes a steel toed work boot…


#53 Kurt on 11.03.09 at 9:33 am

@ Devil’s advocate: I am going to quote Wolfgang Pauli, who once wrote of a paper he was reviewing that it was “so bad it’s not even wrong.” You’ve written some good stuff before; please don’t go down the path of NDJ.

#54 Bill-Muskoka (NAM) on 11.03.09 at 9:35 am

#47 The Vulture

Good for you!

Her next career will easily be as a lawyer. People also need to do the same with arrogant doctors and lawyers who refuse to listen, answer questions, or provide reasons for their actions. Same goes for all business transactions. Customer Service is a joke in most of Canada.

Oh, and the next sales person that says to me ‘No problem!’, in response to ‘Thank you!’, is going to find there is one…THEM!

When WE change our response THEY will change their attitude.

#55 Grantmi on 11.03.09 at 9:36 am

I think this is a way for the FEDS to help out BC and Ontario to deflect the tsunami of backlash & bad press (again) coming next year when the full HST is added onto RE commissions! (along with legal and other fees) IMHO

#56 Bill-Muskoka (NAM) on 11.03.09 at 9:38 am

#51 The Vulture

They thought Bush was there as an agent for the ABL. Thus, they thought it was ‘try out’ time. Obviously, there will not be many Iraqis playing on American League teams, eh? LOL

#57 David Bakody on 11.03.09 at 9:48 am

MLS listings coupled to the Internet have good strong points. To-day more and more people and more is the vast majority must take the sale of their home into their own hands. Remember my posting of a house in an upscale neighbourhood that I mentioned has a For Rent sign in the window along with the For Sale sign on the lawn …. it is now “Sold” why? because the agent saw a lost sale and worked hard to sell it. Same thing happened to another friend I told to do the same thing. My wife’s cousin took it upon himself to advertise on the Internet on his own ….. “Sold” to a happy customer. I tried to sell a good used Honda Outboard around town and it would not sell and those who offered wanted it for nothing, I put it on Internet and sold to some guy in Minneapolis
and he paid for the shipping plus my time at my original asking! So just how much education is on the net, do your home work, good available door to door shipping is available and you deal with the seller direct.

Note: not a bad idea to have a good family lawyer at hand and understand how and when use him/her. This info is also available on line. How many people have a proper will (s) ? Think you buy a multi thousand dollar home and acquire stuff and insurance …. then leave it to Ottawa to settle …. hello?

#58 Bill-Muskoka (NAM) on 11.03.09 at 9:48 am

#16 Chaostrology

Well said. I went through all the training and took the exam decades ago. After getting the insider skivvy on how things worked I said ‘No way Jose!’ and went about my life and business.

All the licensing is just another arm of the industry designed to force the equivalent of a union card on agents.

The Brokers are the real beneficiaries of it all. they and the colleges that conduct the overpriced courses, as well as the government who grants the license and collects their fees.

I found the course information valuable and it certainly would appear to be a ‘professional license’, however, I also found a lot of it was not accurate, and that the ‘exercise’ was primarily forgotten by most practitioners whenever they felt they could get away from it.

Basic ethics are seriously lacking in too many licensed ‘professions.’ I like Hillel’s version of the Golden Rule, written a century before Jesus was accredited with its origin (he was citing Hillel actually) ‘Do not do to others what you would not have them do to you!’

#59 TS on 11.03.09 at 9:49 am

Just because the Competition Bureau has deemed the current MLS approach as non-competitive doesn’t mean this will change dramatically overnight. The various Real Estate Boards may simply assess a rather hefty charge for ‘single’ listings and offer a sliding scale discount that real estate brokers and companies could qualify to use…so in the short term individual buyers could still get screwed as they are now.

It could, the longer term, open the door for more ‘outside’ companies to buy blocks of MLS listings and remarket them to homeowners.

The reality is that real estate commissions have been ‘flexible’ for many, many years. The last time we sold a house we listed it at a 5% commission and ended only paying 2.5% to make an offer under the listing price work out financially (we were buying on the other end so it all comes down to who has more motivation – you or the real estate agent). That was way back in 1986…

#60 D from London on 11.03.09 at 9:56 am

# 21 Happy Renter in North Van

# 36 Matt

Exactly so! I have been grinding this axe for years using the same points. I feel like the yoke of needless expense is lifted off of sellers, and another wasteful tax on the system has been eliminated. Forward ho! with disintermediation (hey, corporations have been steadily eliminating “middle management” for the last 25 years or so to reduce costs and leverage the new technologies – now here’s one for the common man).

MLS and CREA are now free to compete for clients along with any other system that wishes to invest enough $ and new ideas into the market.

I don’t see what Devil’s Advocate is worried about: “Long live capitalism and the free market – may the best product return the highest ROI”. Unless of course s/he has his/her personal interests at heart… :-)

That being said I do have 2 concerns in the form of possible unintended consequences:

1) The usual concern about nefarious and unregulated people taking advantage of an unregulated marketplace a la Russia after the fall of Communism (but hey, I guess it’s “caveat emptor” in this marketplace now…); and

2) The current system imposes a high switching cost on buying and selling real estate. In my opinion this has the effect of: a) reducing the number of transactions to those that are necessary (e.g. death, divorce, downsizing, growing family, move-ups, transfers, etc.) and b) to those who think that the cost is worth it (e.g. some investors who buy to generate rental income and modest long-term capital gains, and people who think that the returns of flipping are high enough to still make a profit and cover the switching costs).

Now I am concerned that with much lower switching costs the “profit threshold” will be lowered and even more people will think they can make a quick buck flipping real estate, thereby adding to the bubble effect and as Garth noted more volatility in the market.

Over time we will see both the benefits and the costs of this landmark Competition Bureau decision. I think overall it will be beneficial (as disintermediation usually is) but we will also have to prepare for the unintended consequences.

#61 Alex on 11.03.09 at 10:01 am

To: dd

Regarding your comments that gold rose only 5% in CAD compared to 45% in USD, just check
As of today, an annual increase in price of gold in CAD is 34.07% versus 46.76% in USD.

Five year increase for gold is:
120.40% in CAD
169.18% in USD

Ten year increase for gold is:
169.18% in CAD
267.60% in CAD

Silver actually rose even higher!
Those are the effects of printing press and manipulation of inflation stats.

So Garth, precious metals “are finished?”,… “Useless rocks?” “…not money because I cannot buy bubble gum at the gas station”?

Get it right: I also said gold is as useful as oil as an inflation hedge. But it’s still not money. — Garth

#62 D from London on 11.03.09 at 10:07 am

I forgot to add the comparison with Financial Advisors.

Garth uses a fee-for-service FA, and apparently is quite happy with the service. Most FAs are on commission, and from what I see here most users of these FAs are not so happy with the service. Perhaps the Real Estate industry will move to the fee-for-service model, where the workers are judged according to performance (and the risks/rewards of disposal of the capital asset fall to the owner).

But judging by the state of the mutual fund and retail investment marketplace lately, it would seem that such a move to fee-for-service might not catch on as fast as we might think in Real Estate sales. Maybe people are shy to pay a preset fee for the service, and prefer the illusion that they are sharing the risks with the FA/RE agent?

#63 Barbara on 11.03.09 at 10:11 am

I suppose that in some respects this may be good news.

I can’t help but wonder though if it’s another ploy to keep people selling and buying houses – less fees, less costs, more incentive to keep the rally going. Maybe I’m just being paranoid and cynical.

#64 Onemorething on 11.03.09 at 10:11 am

Wow, sucker punch to the n’th degree if it does go through.

MLS will likely offer various packages all with a price tag high enough to shank you but hey, it will seem like peanuts when you recall the cost of agent fees.

This is yet another way for our Ponzi government to get their hands around the casino and take out a whole bottom layer of the pyramid.

This is just another way however to boost RE activity by taking out the middle ie 70,000 realtors (who will never find new jobs), getting that commission out of the equation so you will easily cough of the expenditure on new home buyer fees imposed by our Ponzi government very shortly.

One will replace the other, in a wash, while boosting the perception of never a better time buy and sell.

You thought you were being manipulated by the RE Agents, it’s now the Ponzi Government who will take that exact place.

Remember, most things that have been in place for years dont change overnight or without good reason and there is always a manipulative force right behind it.

The force sees a potential catastrophe coming so it is planning to control everything for a soft demise of RE. This idea also by taking the RE agents out slows the process if a massive sell off occurs where resources are limited and questionable at best and 10x the wait to close a deal.

This is what they are counting on! When it’s all said and done, RE will be in shambles, government will have been paid but this is they way to affordable housing for consumers and write downs with insurance for government.

#65 Devil's Advocate on 11.03.09 at 10:14 am

The Real Estate industry has consistently done a very poor public relations job promoting their industry. What the customer understands of the business is squat. But like teachers you all believe because you spent 12 years in school you know what it takes to be a teacher.

More to the point, most agents in their zeal to get the business adopt and perpetuate the stereotypical costly business model potential customers have come to believe is necessary to list and sell and home. The fact is the gross commissions you pay are in great part due to the amount of work a typical REALTOR who gets the listing by caving into the sellers lofty price expectations puts into marketing those overpriced homes that never will sell. The successful sellers pay a premium for the burden borne by the unsuccessful ones.Believe it or not REALTORS actually hold prices down by providing realistic assessments of what a prospective sellers home is worth and should sell for. Take away the REALTOR and a seller will ask huge money for their home comparing it at least to the “ASKING” price of homes on their street NOT the actual “SELLING” prices. That is why 95% of FSBOS (For Sale By Owners) end up listing with a REALTOR. The single biggest sage advice a professional, experienced REALTOR provides is how to intelligently price your home for that it will sell in the shortest period of time, for the most money and least inconvenience to you. Deminish the integrity of the MLS and you will loose that opportunity.

You think you will be able to post your FSBO on the MLS? Not going to happen. What will happen is the MLS will fall apart to an almost non existent state. There will be no incentive for the members of CREA to maintain it. Sellers will loose the single greatest marketing tool at their disposal.

The internet will not replace the MLS. The MLS is not of the internet. The internet is simply a medium we now use to distribute the information to the co-operating membership. You can post a picture of your overpriced home on the internet but that will not sell it. The MLS is the single biggest source of information to home buyers and sellers. Why so? Because you automatically go to the biggest source. With the demise of the MLS there will be no such source.

Cartel? What the… are you talking about. Better shut down the malls because they are causing the demise of downtowns. Better shut down the Costcos. This ain’t gonna end pretty.

But go ahead, disband the CREA “cartel”. Your average person really is quite stupid. Thank God I am close enough to retirement anyway that if this happens I can then sit back and watch this whole fiasco backfire on the lot of you.

But in closing… we do deserve it as we have done a piss poor public relations job and we have not required nearly high enough a minimum education and experience qualification to becoming a REALTOR. That we call ourselves “professionals” is embarassing as only a select few of us actually are.

#66 Bill-Muskoka (NAM) on 11.03.09 at 10:15 am

#54 Grantmi

Every pile has many parts. This is but one piece of the pile of things that need attention by our government. You present an interesting, yet dubious linkage IMO.

Just as with a GUTE (Grand Unified Theory of Everything) in physics, we have no ability to change everything at once. Each law interacts with others. This is a great step forward for the People!

#67 Lisa on 11.03.09 at 10:24 am

“And for that, I was bunned”

Oh Garth, you make me smarter and you crack me up. What a visual. I almost cried laughing, thanks!

#68 PeckedToDeathByDucks on 11.03.09 at 10:35 am

Changing the rules. Garth, I’ll take your “big news” and raise you one. Now this is BIG news:

Banks Get New Rules on Property

For the whole article read The Automatic Earth. “Extend and pretend” to accounting rules is now being applied to commercial real estate. We are not living in the real world of economics anymore. When things go wrong, just pretend that all is well. They learned this from the politicians.

#69 gold bugger on 11.03.09 at 10:47 am

What a bunch of pathetic, whining losers.
Nobody forces you to use a realtor. Nobody forces you to pay 6% .
InvestorsFriend, I ask you what is the common denominator in all your monopoly scenarios? GOVERNMENT REGULATION.
Organized real estate is organized up the wazoo and what do you get? Ridiculously high commissions, inflexible contracts, and unhappy customers.
Real estate boards do not control the buying and selling of real estate. They don’t. To suggest they do rejects the notion of your own free will.
What they do control, through coercion and self-regulation, is the level of service a realtor can provide, the paperwork involved, and yes, the commission.
Try being a value-based realtor. Nearly impossible.
That’s the cartel that should be busted.
But to allow people who have not invested a single dime in the MLS – which as Devil’s Advocate points out is a private database – is just more government intrusion into areas of private contract.
That’s fascism.
No matter how much you babies want to suggest otherwise.

Opening the MLS on a fee-for-service basis seems like a fair compromise, nein? — Garth

#70 Jay Zenner on 11.03.09 at 10:57 am

I’m a REALTOR in the states and have seen many transactions up close as an agent and a manager. There is no question some transactions are easier than others. In fact, I originally got my license when the agent I used on the flip of a renovation which took a long summer to complete made more money than I did for a few hours of work. On the other hand, I’ve busted my butt on “limited services” listings that got very ugly for a variety of reasons but mostly because the under-represented parties involved didn’t know what they were doing. Sometimes agents earn their commissions and sometimes they earn the buns that are thrown at them.
My gripe with the industry is the widespread approach to marketing that was bred by the long boom in real estate. Agents are trained to market themselves…or generate leads…and not how to market homes. One of the comments noted how the seller had generated a slew of inquires from craigslist and then sorted through a number of attractive offers for a quick sale. There are some properties that are so desirable that they can always be sold like that. There are others that are priced so attractively that they will generate that kind of interest. But as the market in most areas has shifted from a sellers’ market to a buyers’ market the competition is now among sellers for a greatly reduced number of buyers who will qualify for financing. This will require much more sophisticated marketing of homes than most agents are capable of. This is true for all aspects of the marketing mix from pricing to using the distribution system that is evolving as the information about homes is “set free” from the control of the MLS. If you doubt this, go to and take a look at just how bad most of the copywriting and photography is.
Nobody brags about the un-brokered transactions that go bad or want to acknowledge the value of the buffer agents often provide between emotional parties in a transaction. I had a friend, a very smart post-doc PhD, who read a book on selling her home herself. She was literally in the air on the way to her new home a thousand miles away when the closing attorney pointed out to the nervous first time buyers at the closing table that they were acquiring the liability for a buried oil storage tank. The buyers bolted. This cost my friend many thousand dollars and she then had to list the home and pay a commission anyway.
There is likely to continue to be a useful role for agent/brokers to facilitate transactions but the pricing of the services are also likely to take the path of other professions. And as long as there is a scarcity of buyers, which will be the case in many markets for many years, more marketing skills will be acquired to better represent home sellers.
Jay Zenner

#71 Nostradamus jr. on 11.03.09 at 11:00 am

This is the future “”normal”” friends and how it affects R E Prices across Canada….

…Call it the “”Europization of North America””…

One car families

Homes with two family ownership… or…homes near public transportation w/ suites

the Slow Death of commuter/satelite communities

Return of Power to Provincial Govt’s…..Quebec took the first step…it will eventually nationalize the Atlantic Provinces under the Quebec Banner.

Western Canada will secede from Eastern Canada

Ontario is the future welfare state.

Nostradamus jr.

#72 disilusionedinGTA on 11.03.09 at 11:08 am

Coodos!!! to Bill in Muskoka for telling it how it is with the Real Estate, so called “Professionals”!!!! As far as I see it, they add NO value to society!

#73 Two-thirds on 11.03.09 at 11:08 am

“Without the benefit of a realtor giving a dozen comparables, and the reasons behind them, sellers will probably ask for the moon. Without an experienced person telling a bidder how to construct an offer that protects his interests, the chances of wandering into a lawsuit blossom. And with potentially thousands of private sales, a chunk of the market will simply disappear from the public eye, skewing stats.”

Comfree comes to mind as a very successful alternative to MLS. While I do agree that pricing is often higher on Comfree, the frequency and quantity of negative experiences from people who used it in the past does not seem to be high enough to warrant public attention. Plus, they do keep some stats of their sales, I believe.

Going forward, more and more transactions will happen online, as the younger generations who grew up with the web increase their purchasing power. Right now a car can be purchased on ebay. It does not seem unreasonable to expect houses to be next, whether on ebay or something new/different, but online, nevertheless.

Demographics is and will continue to change the world. ’nuff said.

#74 Mr. D - Ottawa on 11.03.09 at 11:15 am

#15 Conan

“If you instantly find the perfect house for yourself or if you sell your house to the first potential buyer then the idea of using a sales agent is absurd.

However in the real world it does not work this way.”

Sometimes it does work that way. Our last house was sold for 99% of asking (more than we expected) to the first person who looked at it (on the day it was listed in 2006). We didn’t really need an agent, just someway of getting the listing on MLS. The whole deal was finalized over the long weekend. Our agent was out of town and had someone sub in for her. No open house needed. Too easy to earn that commission.

We found our next house without an agent too. We learned a lot and will probably just retain a lawyer to complete the next sale/purchase.

#75 Van MD on 11.03.09 at 11:15 am

“H1N1 sick days could hamper Canada’s fragile recovery” – from Nov 3

“It’s too early to estimate costs for Canadian businesses. But they could easily outstrip the $2-billion price tag of the SARS outbreak in 2003, said Amin Mawani, director of Schulich School of Business’s health industry management program.”

#76 Kurt on 11.03.09 at 11:17 am

@ Devil’s Advocate (#64) – thanks, that’s much better!

#77 60ish on 11.03.09 at 11:17 am

Good morning, Garth.

We’re having some rough times at home these days, and the ‘bun story’ made me laugh out loud. I have this image of you standing at a podium, dodging incoming buns like George Bush dodging shoes. You must admit, saying what you did in front of that group, is akin giving a speech to the ‘Sons of Scotland’ and advocating the banning of the bagpipe. You’re a good sport for telling story again.

Real Estate Agents are right up there with politicians, in terms of public trust and admiration.

Last month, a friend had a realtor come to their home, to provide a suggested selling price and to list it on the MLS. The resulting recommendation was $620K with a 6% commission (or $37K). My friend knew it was worth more than that. The next day, they had a sign made and stuck it out on the front lawn. The house sold privately in less than a week for $640K. So they have approximately $60K more in their jeans, than if they’d hired the realtor.

I’ve sold a few houses privately, too. With or without a realtor, both the buyer and seller need to hire a lawyer. So why not eliminate the realtor all together? It is what the lawyer says that matters, and his/her fees will be a small fraction of the realtor’s commission.

It’s good to hear that realtors are having their wings clipped a bit.

#78 Repatriated Expat on 11.03.09 at 11:18 am

You gotta blame the RE industry for bringing this on to themselves by maintaining a high commission rates on sales. Anyone can calculate 6% of 500k and realize they can do better. The proposed changes to the MLS just validates the notion.

#79 Got A Watch on 11.03.09 at 11:55 am

breaking -Parliamentary Budget Officer says, to paraphrase, “The Harper Government is on financial crack.” Good to hear one voice of sanity saying out loud what we here already knew – racking up the largest Budget deficit in history is a bad idea, and won’t be easily overcome. Who knew – apparently, no one in the CONservative Party, of course.

Realtors – buh bye, don’t let the door hit you in the ass on the way out. A parastic “industry” that needs to disappear. The sun will still rise in the east, houses will still be bought and sold.

We need services like Zillow and Realty-Trac in Canada. The MLS, as presently run by Realt(ho)rs(TM) is a joke. It is structured in a way that you still have to contact the listing Broker to find out anything meaningful about the property, the information available to the public is pitiful and the whole thing is designed to support the present “industry”.

Maybe I’m being too harsh – if 99% of the present “agents” vanished, that might be good enough.

#80 rory on 11.03.09 at 11:55 am

#64 Devil’s Advocate…

Awww such hubris …if the industry embraced the 1% rule (or lets us say $3 to $6K max) then we would have all the benefits of a Realtor controlled MLS with less Realtors and more economical fees …wahooo!!! … all your other blatherings/rants/excuses are pure CYA BS…pls retire …only 69,999 holdouts to go.

As to the PR thing … CREA has done wonderfully (look how long so called pros could make big $$$) … bottom line – you are percieved not to have earned what you charge …simple really…the people know.

#81 Gord In Vancouver on 11.03.09 at 12:00 pm

The Desperate Vancouver Pumpathon Continues…….

#82 JET on 11.03.09 at 12:06 pm

The CREA may not be so unhappy about this. As I understand it, currently they get a annual fee from members to support operations. Opening up the MLS could mean that listing and re-listing fees will be charged, regardless of whether the property sells or not. The shear volume of both successful and unsuccessful listings could those who own the databases quite wealthy. Look at eBay.

#83 conan on 11.03.09 at 12:08 pm

RE 16

“knew it then and I am just as certain now, that if you are going to call yourself a professional, you don’t work on commission”……..

I have news for you … out side of government every business operates on a commission system.

It might be called a different name like “sales mark up” but the effect is the same.

It is revenue that is used to pay for salaried employees, fixed expenses and profit.

The internet will change the RE industry but there is no way that people selling a home are going to pay a fixed fee to a RE agent who does not sell their home.
Or a fixed fee to a RE agent who does not find them a good home to buy.

My best guess is that in the short term the consumer will benefit. Ontario RE commissions will be more in line with British Columbia’s (even though it does work that way now with negotiable rates).

In the medium term government will think of a way to turn those consumer savings into a new RE tax.

In the long term we will go back to the way RE works now but with a much heavier internet schwing to it. Reduced commissions will be in place but no savings to the consumer because the government will be the new middleman.

#84 BAD on 11.03.09 at 12:17 pm

#13 and #64 Devil’s Advocate:
Personally I’m all for a minimalistic government and I firmly believe that the more the governments meddle in the economy the worse it gets (even if there are short term gains). However the anti-trust role of the government is one of the critical functions that it needs to perform. Anti-trust or competition laws can be traced to about 50BC (at least 2059 years old) and are absolutely necessary for properly functioning market.
As always, the most upset by these laws are those who will lose the most in free competition and need the “cartel” to protect them.

On another note – Golden Bubble on the rise?

RBI May Buy More Gold from IMF

#85 Stop Puttin Down Boomers on 11.03.09 at 12:17 pm

#56 David Bakody on 11.03.09 at 9:48 am

I think if we ever sold we’d try doing it on our own now, with the assistance of a lawyer, of course. We sold our last home (an inexpensive one) with a non-MLS agent & bought our existing one with him. He arranged for the purchaser to get a 2nd mtg. (private investor guys). Must say this was pre-net days. I’d drive around neighbourhoods that I was interested in he’d arrange viewings and drive us to them.

Re selling/buying stuff on the net. My husband does this on Ebay a lot, using Paypal, of course. He knows how to bid & has gotten some terrific buys, especially on BMW bike parts which are atrociously expensive here. Just last week he bought the latest type of computer camera (for Skype usage) for 1 cent tho he’ll pay $5. shipping. Still a good deal.

Thanks for reminding me I have to change my will. BTW, its not Ottawa, unless the laws have changed, its the individual provincial trustee’s offices that make the money from those who don’t have a will. Many years ago I did a study to help computerize our govt.’s public trustee’s office. The Banks, IIRC, were big winners too. It was an eye-opening experience.

#86 The Great Gazoo on 11.03.09 at 12:22 pm

The competition is already in full swing, the following sites offer pretty thorough private sale opportunities:

The traditional re industry (CREA) just got too greedy, didn’t want to share the pie, it wasn’t the high commissions that was the root cause, it was their blatant obstruction of consumer options and free market business practices that nailed them.


#87 Herb on 11.03.09 at 12:23 pm

As the reverse-mortgage commercial used to sing, “Wouldn’t it be nice?”

I’ll believe the RE cartel opening up to competition – or the government forcing it to open up – right after the oil cartel opens up to competition at the pump. There may be lots of talk and eyewash, but real action would be neither in the nature of the beast nor in its interests.

By the way, what I liked best about the crisis in real estate in the early 90’s was the rumoured reduction in the number of real estate agents in Ottawa from 5,000 to 1,500.

#88 Jonathan on 11.03.09 at 12:32 pm is Canada’s latest home search engine (in Toronto only right now) and it has all the perks of zillow.

#89 Sardine on 11.03.09 at 12:45 pm

I personally think that real estate agents have a role to play but for the last few years they have not needed to live up to that role. How many people have been to an open house (or several) where the agent just sits there and then a hundred or so people march through and the house sells for a significat percentage above asking and the agent making a significant profit for a day or two worth of work? How many people have asked for help looking for a home only to have automated listings sent to you – most of them which don’t fit what you asked for in the first place. What happenned to an agent actually looking at the details and helping you find something suitable for YOU?

Forget it, there has been too much “free money” lately and the realtors have been glutting themselves on easy sales, 5 day turn arounds, and stupidly overbidded homes. When their clients go bankrupt and are sitting in debt stunned will the realtors shed a tear? What happenned to giving honest real estate advice? Buy buy buy?

Give me a realtor who will work for me and help me actually find a home reasonably similar to what I am asking for and I will gladly pay their fee. But don’t send me your automated listings and expect me to feel like you are bending over backwards for me.

#90 jess on 11.03.09 at 12:46 pm

it seems electronic systems are easy to manipulate

mortgage fraud

Gill v. Bulcholtz, [2009] B.C.W.L.D. No. 2841

#91 kitchener1 on 11.03.09 at 12:48 pm

This is awesome news for the average guy on the street.

Everyone crying about MLS and that it is going to fall apart etc… what are you guys smoking??

With a pay per fee listing, MLS revenues will soar, the only thing happening is that the government is cutting out the brokerages. How much of the commission is acutally paid to maintain MLS? I would bet that with a pay per listing fee of say $1000, MLS will be more profitable then ever.

Real estate agents are like brands, the ones that have established themselves will always have a market and an income. What this will do is cul the herd of part time/weekend/stay at home mom’s etc… RE agents from the business.

In any retail business there will always be real sellers and dreamers, people will always need to sell so the market will set the price, it always does.

Every other genre of buying and selling has been impacted by the internet. Look at expedia et all, in the past you needed a travel agent to book flights, now anyone can search for a good deal. Same with cars, tons of websites out there informing you of dealer invoice costs etc…

I honestly do not know why real estate agents are upset about this, they are always yapping about how they “bring value” to the transaction. Well, if thats true then MLS should only be a small equation of that value propistion.

Now, if the only value they bring to the table is a listing on MLS, well then, 5% commission from a buyers perspective is a lot to pay for a simple MLS listing.

Sure, some agents advertise the property in outside papers, but I would say that 90% of them just list it on MLS and thats it.

As for resale data, anybody can get a user software lic. for terranet, the database that RE agents use to track sales and selling price for a price , aerial maps etc.. for(approx $2500)

As a seller, I could have access to the same info they have for $2500, plus, I could list with MLS for a nominal fee (lets say apprx $1000), even at $3500, I am way ahead. And in today’s computer centric society, any 12 year old kid can search and find you a house that fits your search parameters. Where is the value?

#92 BAD on 11.03.09 at 12:53 pm

Salt!… Salt!… Large grain salt!…

We know it’s an unusual hobby, but we can’t help ourselves — it always brightens our day when another forecast from Canada Mortgage and Housing Corp. drops into our mailbox. What do we find so beguiling? Must be the gentle mix of fact and whimsy. No matter what the situation, a CMHC forecast is always soothing, always positive, always upbeat about real estate.

CMHC forecasts best taken with a large grain of salt

#93 ludicrous assertions on 11.03.09 at 1:10 pm

“I’ve sat in the inner sanctum of boards in Vancouver, Calgary and Toronto, and you can ascertain in a flash these are big businesses. In Toronto, for example, the president of TREB, elected for a one-year term by board directors, has a personal staff, opulent office, lavish perqs and high media profile. It’s a good gig, thanks in large part to a money machine known as the MLS”

Coming from a politician…

#94 jess on 11.03.09 at 1:11 pm

from the financial post 2006/

“In 1993, the Ontario government sold a 50% stake in Teranet to a group of private investors. In August, 2003, the Province sold off its half for $370-million, which meant the whole company was deemed to be worth $740-million. The talk now is that the issuer is worth at least $2-billion.

#95 Confused in Victoria on 11.03.09 at 1:12 pm

Read this from Newsweek! The guy is a respected journalist. I don’t get it…I really think things are going to get bad.

#96 Men With Hats on 11.03.09 at 1:14 pm

Maybe the barrage of buns being launched in your direction was ’cause you looked hungry .

#97 Bill-Muskoka (NAM) on 11.03.09 at 1:15 pm

Hooeeeeeeee! Reading many of the comments from RE agents is like going to a Whine Tasting Party!

Real estate fees could be slashed

Then there is the lawyer who has sued CREA and TREB. SHARK FIGHT!

Tough lawyer hails real estate fee victory

#98 S. on 11.03.09 at 1:16 pm

Simple way to avoid chaos. Get your lawyer to write up the offer. They actually have ready made forms for that. A couple of hundred bucks in legal fees for this service is better than a few thousand in realtor commissions.
BTW, I was always a little surprised at the hostility often directed at realtors by some contributors to this blog. Granted, the fees are exorbitant for the level of education required to do the job. At the same time in the sales industry there are commission based “professionals” that truly do nothing more than drive up the prices of goods and services just so they can make a handsome commission. A car salesman can make several hundred bucks (or a lot more!) for doing not much more than taking a 15 minute drive with a client. Insurance industry is notorious for paying its sales stuff a very high multiple of your monthly fees just for signing you up. (This last one from an insurance marketing friend of mine.) When making a purchase with a price tag almost always exceeding six digits getting professional help is imperative, whether that comes from a lawyer, realtor or a notary public.
There is another, often ignored, reason for some kind of a middle men. By providing a firewall between a buyer and seller they often facilitate a sale that otherwise might not happen. When buyers’ and sellers’ egoes crash it can be a nasty sight. Been there, done that.
(Don’t want to come across as an apologist for CREA but it really is a minefield out there)

#99 kc on 11.03.09 at 1:22 pm

Confession…. I haven’t had the time to read all posts on todays Cartel…. (will catch up later tonight)
however, lets think Jamaica for a second….

If you have 80 minutes of time I do suggest you watch this for it will place our world in perspective … IMF and world globalization plays havoc on people.

No Comments from me necessary for this is self explanitory. Life and Debt


#100 AM on 11.03.09 at 1:23 pm

Everyone seems to interpret the discussion on CREA regulations differently. One clearly visible problem with the current system is the monopoly that has evolved from the MLS. The MLS is structured in a way that prevents any competion with brokers that try to work outside of the MLS system. MLS brokers will not deal with FSBO’s or other discount brokers, even though they are working on behalf of a buyer to find the right home for their clients. The brokers are going to go where the money is = broker 1st client second (last). I’m sure brokers have access to FSBO websites but I highly doubt they will take any clients to them.

I sold my house in two days back in 2004 and I don’t think my agent spent more than a day of his time for the $13,000 it cost me. The listing didn’t even make it to the MLS since I took the first offer at 99.4% of asking. I even set my price above the agents suggested list price; not out of greed but because I did my own CMA of the recent list prices in my neighbourhood. The current system of buying and selling a home through the MLS is the only option for most people; it can be an intimidating process and that’s why people continue to use this sytem, even at the inflated costs.

The MLS needs to be open to a fee for listing service. This puts more control in the hands of the seller. CREA can charge on a monthly basis for this service and if people want to list at a higher than reality price, they can continue to pay for the listing service month after month to keep it listed. If you need an agent to hold your hand through the process, than pay for that too -separately. We need a system that lets people feel that they got what they paid for, and promotes competition between brokers.

I can see a huge backlash from CREA and their agents. If they have to survive on a competitive commission, then the number of agents in this country will be cut in half. I wouldn’t blame the brokers for this; it’s the industry and lack of competition regulation that has allowed this gravy train to get where it is today.

#101 brico9 on 11.03.09 at 1:24 pm

Great news for the folks on the fence waiting for a price correction in Canada. Go direct to the seller.

Garth -Any comments on how this event will effect price? I think it will lower them in time – since the Cartel is now removed. No filter in the form of MLS.

How about distress RE such as fore closures, estate etc?? Can we buy direct form the bank.

Many bad experiences with lying Realtors. I did sell my own house on “We-list” a few years ago here in Calgary. It took a week, got $20,000 more than the so called expect (Realtor(s) said who felt left in a huff when I did not agree to the standard rate)) and saved all the fees. Paid the person (RE Lawyer) a bit more in fees – since he did most of the work.

#102 Bill-Muskoka (NAM) on 11.03.09 at 1:29 pm

#70 disilusionedinGTA

Thank you. The Truth will set us all free.

#103 Chaostrology on 11.03.09 at 1:40 pm


If you work on commission, you are not a professional.

PROFESSIONALS, have letters after their names and thus have acquired the skill and knowledge to stand on their own. Their liability standards are also much higher, hence “Standard of Care”.

When I was in RE, we were admonished not to call the vendors “clients”, as the word “client” implies a higher “Standard of Care” and thus the responsibility to that party is higher. We were told to refer to the parties involved as “Customers”, thereby invoking a much lower “Standard of Care, and sidestepping liability issues.

Doctors, lawyers, accountants, engineers do not work on commission. Yet they are in business. They have “clients.”

Plumbers, electricians, carpenters do not work on commission, yet they are in business. They have “customers”.

Salespeople that work on commission are not “Professionals”, they are avaricious, prevaricating sociopaths. It’s the nature of the work, it’s the nature of the beast. If your personal welfare depends upon you being able to “persuede” others into doing what you want, then you are not a professional.

Don’t get me wrong, sales and marketing people are essential to the business process, but let’s not glorify them.

Fortunately for the beast, there will always be an overwhelming supply of zebras for the beast to feast on, but not all of us want to be lunch and therefore we celebrate the break in the wall around the watering hole.

Once a person can recognize what the beast looks like, they are well advised to stay away from the beast.

BTW, I have news for you, the succeeding co-horts, will have no problem using the internet exclusively to conduct their business, whatever it is, this includes RE.

Even lions are eventually lunch for someone.

#104 Bill-Muskoka (NAM) on 11.03.09 at 1:47 pm

Oh, and perhaps the government will (some already have by by-law) prohibit all the speculators who buy up new homes only to rent them out (or flip them) and forget about maintenance or the neighborhood?

These ‘spec’ homes are nothing but inflationary traps for everyone else. People need and deserve decent and affordable housing. Ban Speculators in developments and watch prices drop to more realistic levels. The RE industry has been feasting on this market. Diet time!

Many US States prohibit such practices and impose heavy tax penalties for non-occupying speculators.

Housing has been turned into an investment market instead of a housing market. Another case of pissant regulation by whore politicians. Houses are for PEOPLE to live in and raise families.

#105 jess on 11.03.09 at 1:50 pm

a consumer cartel

200 consumer groups banding together for the consumer protection

#106 Erasmus on 11.03.09 at 2:15 pm

Foreclosures are up in the US – in this city up over 1000% in the recent quarter. The US markets are heading down and it won’t be long before the Canadian market follows suit. Thanks to Garth many of us have already planned for this.

#107 dd on 11.03.09 at 2:29 pm

#69 Nostradamus jr.

…Return of Power to Provincial Govt’s…..Quebec took the first step…

Quebec wants the transmission right of way to the states. That is why they bought BW Power.

Don’t read too much into it.

#108 dd on 11.03.09 at 2:33 pm

#12 Nostradamus jr.

…will cause overall R E Prices to maintain their rise…

How? Real estate as a return on investment today is in sad shape. It will have to compete with all other forms of return. I don’t see RE or Rent increase substanially if wages do not move. The only reason it is moving now is because of cheap money.

#109 David Jensen on 11.03.09 at 2:35 pm

No more bozo’s with a high school degree and a 2 week training course making 6 figures selling homes?

Sounds good to me.

Real Estate Agents were the most grossly overcompensated group that employs a large number of people I can think of.

#110 rubberduckie on 11.03.09 at 2:41 pm

Asking prices don’t mean anything.

I want to see actual sales prices!

#111 jmcanuck on 11.03.09 at 2:49 pm

Wow…finally even the MSM is starting to come around.

CMHC Forecasts Best Taken With A Large Grain of Salt

#112 West Coast on 11.03.09 at 2:58 pm

“Dead Government Walking”

So what happens when the IMF bails out an entire country?

Check out what happened to NZ in the 90’s.

#113 West Coast on 11.03.09 at 3:00 pm

MORE good news from TBI:


Bank Of America Charging 279% Interest

#114 tech4monkies on 11.03.09 at 3:44 pm

Long over due. Realtors are just like used car salesmen. They serve zero purpose what-so-ever. They don’t even provide the legal service, you still have to pay for those fees yourself, in addition to their 6% and home inspection, etc, etc… an their “professional opinion” and code of ethics, man dont get me started….

I really hope this happens quickly. They use the MLS to control the information and it is a scam to ultimately make sales. There are sites out there for sale by owner (FSBO) and I personally will NEVER deal with a realtor (or used car salesman) ever, regardless of what “special deal” there rate will be.

I’m frothing at the mouth over this one. Time to burn off the leeches.

Another awesome post Garth, your a credit to society. Cheers!

#115 Jim on 11.03.09 at 3:45 pm

CHMC Forecasts should be taken with a grain of salt:

#116 Devil's Advocate on 11.03.09 at 4:03 pm

“Opening the MLS on a fee-for-service basis seems like a fair compromise, nein?” — Garth

Ya right and then they’ll just bitch about that fee for service rate we charge.

Actually Garth I, and many of my colleagues, could buy into the whole “fee for service idea” very eagerly. Sure as hell would beat the crap outta taking a listing that will never sell, spending a swack of dough advertising it etc and never recouping a cent. “Fee for service”… I love the idea. Fact is right now too many get something for nothing and those who do pay pay more because of cost of business expense incurred carrying those unsuccessful sellers. We are not a public service after all and do have a responsibility to “bring home the bacon” to our families just like anyone else. Because it is a competitive business many inexperienced REALTORS feel forced to take those overpriced listings hoping they will sell but they never do and that cost must be recouped somewhere along the line.

“Fee for service”… you got it! I’m all over that one! Then I would take your overpriced listing any day knowing I will get paid whether it sells or not. You will pay and pay and pay for my services as your house never sells because I have no incentive for it to sell. It’s like a drawn out litigation in which the Lawyer is laughing all the way to the bank.

Bottom line is; how we run our business is our business. If you don’t like it find another REALTOR who runs his/her business on a model you prefer. Fact is, the reason most use the current most prevalent model you dislike so much is because consumers wouldn’t have it any other way… Fee for service? Trust me, most REALTORS would buy into that in a heartbeat. Can you imagine charging a fee for services whether you got the job done successfully or not? THAT would be like… like… well that would be like landing a sweet government job!

Also I should point out that you can, today (in British Columbia anyway), list your property on MLS with a discount brokerage or even pay a nominal one time posting fee to a brokerage that will put your property MLS with notification that Buyers and their REALTORS are to deal directly with the seller – like a FSBO. This is essentially what the Bureau is seeking – a “service menu” of sorts from which consumers can choose the level of service they want to pay for. Fact is it IS being offered, in British Columbia anyway. But then in B.C. we have “Buyers Agency” which I don’t think Ontario, in all it’s self professed wisdom and glory, has caught on to yet. See we aren’t such backward hicks out here as you Easterners think. It’s just that anything less than full service commission based on results type packages are not such a popular choice amongst the paying public. The public likes the REALTOR to encur the up front expenses at his/her own risk paying only if the REALTOR gets the job done.

The industry has changed a lot in the past decade and will continue to change. You will see more exclusive buyer agency and you will see the demise of limited dual agency but there will always be “agency” as a matter of law…Unfortunately what the Bureau is doing is working toward diminishing the legal fiduciary responsibilities of agency in real estate. It now simply becomes a question of whether CREA is willing to take up the fight to maintain the integrity of the current system or let it laps into a state of chaos like car sales where otherwise responsible professional agents become nothing more than self interested sales people with no fiduciary responsibilities what-so-ever to the customer.

But again, who is to blame for this current state of affairs? I believe it is we the REALTORS who are to blame. We speak of high standards but could do a lot better job of implementing and enforcing those high standards. Had we done so long ago we would not be facing such a crossroad. We (REALTORS) should heed this as a warning shot across our bow and clean up our act ridding our profession of those who give us a bad name and then setting about raising the bar to entry with higher educational requirements and practical standards like an articling period.

Clearly based on public opinion alone have fallen short of consumer expectation at some unacceptable level.

#117 Nibs on 11.03.09 at 4:03 pm

You know, Garth, I think you’re bang-on about real estate…but your stock market predictions kind of suck. They’re starting to become a classic contrarian indicator.

…and technical analysis is a joke!

Stick with real estate. At least you’re right about that much.

Hey, I predicted the equity markets would led this recovery. They did. Did you want a 60% return in six months, instead of just thirty? — Garth

#118 Devil's Advocate on 11.03.09 at 4:12 pm

And I thought the only think Garth and I disagreed on was GOLD… pushing $1,090.00 today by the way ;-)

#119 David Bakody on 11.03.09 at 4:16 pm

Fr. CBC News.

Disasters may catch Canada unprepared: AG report

If a terrorist attack, massive flood or other major disaster strikes, the federal government is unprepared to lead a co-ordinated emergency response, Canada’s auditor general has found.

So if you are one of many Mr. Turner has referred to in his posts of having all their eggs in that McMansion best you have all your bases covered should it be threatened by ill winds. Bon Chance.

#120 lgre on 11.03.09 at 4:31 pm

This is excellent news, agents bring nothing to the table, except their bank accounts. The monopoly has forced many people to use an agent even if they dont want to. Houses sell houses not agents, the MLS website gives the exposure and the sale is done if everything else is in order.

Just like you can sell your car or ipod privately, there is no reason why you cant sell your own house..get a lawyer and the trasnaction is done.

#121 Ali on 11.03.09 at 5:03 pm

I saw this “for sale by owner” listing on Craigslist:

now it’s an MLS listing:,44,36,26,10105,41,21,32,30,28,23,33,22,39,24,43,29,40,34,853,31,35,42,27&ComID=&agentid=&MLS=V795317&rowc=24&rowp=21&BCD=GV&imdp=&RSPP=20&AIDL=26&SRTB=P_Price&ERTA=false&MNAGE=0&MXAGE=200&MNBT=1&MNBD=0&PTYTID=1&MNPRC=200000&MXPRC=900000&SCTP=RA

I guess this company does this for about $1300 (for a $389,000 condo)…..pretty interesting

#122 TheComingDepression on 11.03.09 at 5:12 pm

Hey, I predicted the equity markets would led this recovery. They did. Did you want a 60% return in six months, instead of just thirty? — Garth
Thats the funniest statement I have ever heard on this BLOG! A recovery? When the US gov’t pumps money into the market to prop it up? THATS A RECOVERY? Now they invented a stimulus package for GOLF CARTS, to the tune of millions.
If I give you $10 and you spend it, but I charge 2% interest does that make you RECOVERED? No, its called A BAD DEBT. You have to pay it back with interest. Now add up the trillions in the US and the BILLIONS in Canada and say that is recovery? Borrowed money? Am I missing something here? Free money for cars, houses, carts and the list goes on. Its all called a depreciating asset. Recovery my azz.

Say, how’s that depression working out for you? — Garth

#123 Bill-Muskoka (NAM) on 11.03.09 at 5:23 pm

#98 brico9 on 11.03.09 at 1:24 pm

Great news for the folks on the fence waiting for a price correction in Canada. Go direct to the seller.

Consider that we have mostly lost the art of bargaining? We are so used to paying ‘asking’ or ‘list’ or ‘MSRP’ that our society has become nothing more than a bunch of inept consuming clowns.

Go to the Middle Eastern countries and experience what ‘wheeling and dealing’, and bartering are about. They mastered such things millenia ago. We might as well all be tied into the Matrix!

Seller talking to potential Buyer. That is what a true free market and real capitalism is supposed to be. Likewise, we have far too many middlemen involved in our business world. We can thank companies like Apple for that trend that started in the 1970’s No matter how much you wanted to sell their product you had to do two things without exception.

1. Have a shopping mall storefront location.

2, Order an initial inventory of $25K+

That was a lot of money in both overhead and inventory back then. Apple wonders how the PC grabbed the majority market share? Answer Steve Jobs marketing plan. The PC’s were available to anyone willing to sell them, as was the software to make them actually do something besides blink.

Today manufacturers will seldom even deal with retailers. Everything goes through a ‘distributor’ which means the distributor doubles the manufacturer’s price, and then the retailer doubles the distributor’s price. Example: Manufacturer sells their widget for $0.50; distributor sells same widget for $1.00; retailer sells same widget for $2.00 Then they force large orders by adding shipping costs for small orders. Everything gets passed along the chain. Then the government taxes the same product, sometimes thre times. All neatly buried out of sight, thus out of mind. Get out the K-Y Jelly because it will always hurt.

Additionally, no one actually knows anyone anymore because all the people are communicating by email or telephone. Then we wonder why there are so little ‘ethics’ left in business? Simple, because we no longer deal with real people in real manners.

#124 Grantmi on 11.03.09 at 5:24 pm


Those buns… were they Hot Cross Buns??

“Don’t Move along! It’s ok to look!!

#125 Bill-Muskoka (NAM) on 11.03.09 at 5:30 pm

#115 Devil’s Advocate

TSX gains as gold hits record

The gold sector ran up 6.43 per cent, with the December bullion contract in New York ahead $30.90 to US$1,084.90 an ounce after the Reserve Bank of India bought 200 metric tons of the precious metal. Oil gained $1.47 to US$79.60 a barrel.

#126 Kelly McMae on 11.03.09 at 5:30 pm

What fantastic news. Why not just apply the same process that we use for used cars. Have an insurance licensing cartel/regulator and allow the market to operate and price itself, without the “wisdom” of commissioned sales people carrying a K-mart cardboard certificate.

#127 OnlyTheBankersLaugh on 11.03.09 at 6:06 pm

Bankers still laugh – this time at realtors.

Keep that lending going…. CMHC will accelerate their lending, Carney will drop interest rates to ZERO and Harper will declare a $20000 tax credit for homebuyers and this fake economy will surge until there is a majority government.

Unbelievable! When will reality hit?

#128 Emma on 11.03.09 at 6:10 pm

Our realtor rocked! I was watching the market rise from 2001 and then there was a pocket in the fall of 2003 so we jumped at the chance. We viewed 9 of the cheapest 15 houses in Toronto’s C1 district, picked one that we liked (and could lowball) and closed in 30 days. He thought the bid was starting too low but he went with it anyway! We paid 83% of the original asking (which I still thought was about $50K over at the time!). The whole deal took about 10 to 20 hours of his time and at the end he gave us a grand of his commission. Very unexpected and a sweet deal!

We didn’t have to sign any contract with him. He steered us away from a couple of lemons – including one we loved that had a side wall caving in! He told us how to prioritize the home inpection problems and what they should cost. Most of all, he gave us confidence as first time buyers when he said that if we didn’t like it after a year, he’d sell our house no problem! We still love it – the value is up close to 65%, the mortgage is almost done and there’s still no way I’m selling!

I would go with him again but my friends have had a helluva time with their realtors and always seem to be waiting for the four month contract to expire so they can get a new one.

And what’s up with the dudes who list without pictures?? Not everyone is looking for a staged house with ensuite bathrooms and double sinks. Some of us would rather own a shack than rent a mansion!

#129 Vancouver_Bear on 11.03.09 at 6:17 pm

#12 Nostradamus jr. on 11.03.09 at 12:07 am

What re you talking about? Stop smoking that shit!

#130 Vancouver_Bear on 11.03.09 at 6:35 pm

#12 Nostradamus jr. on 11.03.09 at 12:07 am

No honestly…who will double who or what will double what?

Have you seen what happend to owelympix rentals? Nobody wants to come here even for owelympix….or may be the price is too high? Let the race to the bottom begin:

So idea of leasure shithole capital of the world is falling apart…..looks like world is not coming here….and you will end up paying for the 5 circle circus yourself….(Don’t count on me I am moving south).

And the myth about plenty of clear water is just a myth, 2 days of heavy rain and water turbidity almost hit the shit fan:

So clearly if heavy rain continues for more then 3-4 days…then prepare to see brown water with real crap coming from your tap…..only stuff you are smoking helps you not to see it.

#131 jess on 11.03.09 at 6:38 pm

That will ensure a steady supply for the indian brides who keep the millions employed in this market

#132 jess on 11.03.09 at 6:45 pm

worth watching

#133 Seilfworcehtsa on 11.03.09 at 6:56 pm

It would appear that many on this blog consider
re agents and brokers as parasites and little better than roaches. As such they, no doubt, belong to the same genus as politicians, civil servants, CEO’s, dentists, lawyes and others others collectively known as HOMINA HORRIBILIS. And RE owners who sell out at humunguous tax free profits are lauded as the epitome of sagacity whereas their preambulatory attitude would indicate horseshoes in a not so sunny place. Such is life. The market creates RE agents and not the other way around and the market is what it is and it too has its periods of irrationality.

#134 Sam on 11.03.09 at 6:58 pm

must read Garth:

#135 The VULTURE on 11.03.09 at 7:24 pm

Thanks for the feedback Bill-Muskoka (NAM)

I think they should toss bras and panties at Garth instead!

Better yet, toss $100.00 bills…don’t those guys make the big dough anyways??

#136 Iain on 11.03.09 at 7:59 pm

“In 2006 about 68.4% of households in Canada owned their residence, which is just about identical to the level reached in the United States before the housing bubble collapsed.”


#137 Pat on 11.03.09 at 8:03 pm

@ #116 Devil’s Advocate on 11.03.09 at 4:03 pm

” You will pay and pay and pay for my services as your house never sells because I have no incentive for it to sell. It’s like a drawn out litigation in which the Lawyer is laughing all the way to the bank.”

Bad analogy, on many levels. What exactly are your services while the house is sitting on the market? You put some effort at the beginning to prepare the portfolio – pictures, ad, etc., pay a fee to put it on the MLS, then you have a bit of work during closing. Open houses are useless for selling – they are only to your benefit, to advertise yourself to potential future clients.

Am I missing something? What services are you expected to be payed for while the house is sitting on the market?

On the other hand, I am wondering if with the present systems RE agents are not motivated to list properties slightly below market value, say, 2-3 %. It would hardly affect they fees but could greatly speed up the sale process (at vendor’s expense). Any observations on such a practice?

#138 tjmikey on 11.03.09 at 9:02 pm

I wonder if these savings will be eaten up in the form of increased CMHC fees?

The Feds tend to cover their butt riding on the backs of others….why not the Realtors this go around?

#139 Nostradamus Le Mad Vlad on 11.03.09 at 9:02 pm

When thouest spake those (re-arranged) words “. . . Monty Python . . . I was bunned.”, was thouest referring to this? — — If the shoe fits, wear it!

Y’all can handle the CREA-Nortel-OPEC-FunnyMoney Cartels, so I’ll move on to sumtin’ else.
The link I recently posted re: China saturating the world with gold (which would devalue the price), this Goldbugs will make things interesting. Comment by “Which means the price of gold is about to explode and all those people who fell for the “cash for gold” TV ads got screwed.”

Then China pulls the plug in a few years (more or less), and these two links, things are looking mighty strange. — India / Scotland. What’s wrong with good, old-fashioned conspiracy theories? They used to be great fun!

And a one and a two . . . Buyers or Farmers Market
/ All Together Now! “Isn’t the only hope for the planet that the industrialized civilizations collapse? Isn’t it our responsibility to bring that about?” — Maurice Strong, 1992″

#140 john m on 11.03.09 at 9:08 pm

Well the option has always been there for any vendor to sell their property privately? …….With the internet and so many options for advertising and marketing…why don’t more people do it?……Another example of the Government sticking their nose into private enterprise…….and it won’t end well i betchya!

#141 Devil's Advocate on 11.03.09 at 9:31 pm

#137 Pat on 11.03.09 at 8:03 pm asked…

“What services are you expected to be payed for while the house is sitting on the market?

On the other hand, I am wondering if with the present systems RE agents are not motivated to list properties slightly below market value, say, 2-3 %. It would hardly affect they fees but could greatly speed up the sale process (at vendor’s expense). Any observations on such a practice?”

Answer #1;
I don’t advocate the practice but were it implemented you can be sure, after such further degradation of the system, that what ever services (real or perceived) they could get away with billing for would be billed for. Someone calls the REALTOR about your property you get billed for the time they spent dealing with the phone call. Your home goes in an ad you get billed a.) cost of advert. and b.) billable prep time for the advertisement.

Hey I absolutely agree glossy ads don’t sell houses they sell REALTORS. But the public doesn’t understand that and generally speaking demand those costly needless trimming such as big glossy ads in a publication which by the time it hits the shelves your home SHOULD HAVE BEEN LONG SINCE SOLD. Maybe if and when they are actually paying for those ads up front they will realize the folly. Just one of the current expenses REALTORS incur, ultimately at your expense, that really are unnecessary and if eliminated could result in a lot lower commissions.

Answer #2;
By pricing your home “intelligently” it becomes the “hot new listing” which everyone is after. Result, if done right is bidding wars like you never thought possible, in any market, and your home sells for more than asking price. Price a home “intelligently” and it will sell… fast… that will result in a return on the REALTORS investment which will be less so that he/she can charge you less. As it is the time and expense is at the REALTORS sole risk… shift that to the seller and you will see things change in a hurry. They won’t list it unless they are serious and if and when they do they will want it sold yesterday to avoid those expenses pilling up.

Dude my handle is “Devil’s Advocate”. Get it? The first part of my post to which you refer is just that. These responses to your questions… the reality of the business. These answers are in great part how to get that which most on here are after… lower fees. You see it is not REALTORS doing but for their lack of courage to tell their principles what they need to hear rather than what they want to hear. And THAT distinguishes a professional from a hack.

And that’s enough free advice for one evening.

#142 Watched Bubble Never Pops on 11.03.09 at 9:35 pm

#137 Pat

“On the other hand, I am wondering if with the present systems RE agents are not motivated to list properties slightly below market value, say, 2-3 %. It would hardly affect they fees but could greatly speed up the sale process (at vendor’s expense). Any observations on such a practice?”

Read Freakonomics. It happens.

#143 Watched Bubble Never Pops on 11.03.09 at 9:36 pm

#136 Iain


Nope. Still an RE boom in Canada. Sorry.

#144 Confused on 11.03.09 at 11:07 pm

#132 Jess

Thanks for the link – I recommend it to all others in this forum.

#145 Dan in Victoria on 11.03.09 at 11:45 pm

Post #141 Devils Advocate.How much an hour are you going to charge?To sell my house I am going to have to pay $20,000 give or take….So say you charge oh I don’t know 50 bucks an hour,just saying.That would work out to ummm….. 400 hours or 10 weeks.That would be JUST my house.And no I don’t want to hire your flunkys just you,a pro.Don’t take this the wrong way,its not meant as an attack.It’s time toThink clearly,not emotionally,time to get ahead of the curve.Change is coming.Good Luck.

#146 Taxpayer like you on 11.04.09 at 1:01 am

90 Jess

I disagree with the article where it states that the electronic registration system is somehow easy to
manipulate. I have not reviewed the particulars of the Gill case, but am relieved at its eventual outcome.

The electronic registration system in BC is only open to Lawyers, Notaries and Surveyors. In the Gill case, the fraudster somehow convinced the lawyer/notary they were genuine. The transaction could have completed either electronically or hardcopy.

There can be “weakness” where lenders do not perform
due diligence. For example, even asking for an old-
fashioned appraisal can raise the alarm. Can you imagine
the appraiser showing up at the house with camera and
tape measure and trying to explain to the owner what they are doing there?

#147 Bill-Muskoka (NAM) on 11.04.09 at 8:39 am

#141 Devil’s Advocate

One of the most major income sources for newspaper publishers is RE! Follow the money!

Then look at the megabucks sent on TV advertising, very little of which actually shows a home for sale, only hyperbole about the Big RE Company.

#148 Bill-Muskoka (NAM) on 11.04.09 at 8:56 am

#135 The VULTURE

Ewwwwwwwwwwwww! Do you know what has touched those bras and panties? LMAO! Besides some bras have spring metal in them…eye and puncture hazard to be sure. Not to mention getting all tangled up in the straps while fending them off. Poor Garth!

Better yet, give Garth a Jai Alai Racket so he can give them a good ‘return’ on their investments! LOL

#149 Devil's Advocate on 11.04.09 at 9:07 am

#145 Dan in Victoria on 11.03.09 at 11:45 pm

Listing REALTOR gets half the commission $20,000.00/2= $10,000.00

Given my education, experience and OVERHEAD costs (not accounting for billable expenses) I believe my time is worth well over $100.00 billable per hour but lets go with that. If you did as I told you to achieve the highest price, in the shortest period of time with the least inconvenience to you it should take a month to have a firm deal. I would expect to put about 40 billable hours into it that would be $4,000 plus specific expenses (advertising etc. which you might expect to amount to a reasonable $1,500.00). My office overhead runs about $60,000 per year or $5,000 per month, so if I sold one house I would be negative $1,000.00 at the end of the month. For the work I think a minimum annual wage of $100,000 taxable is reasonable, more if I work harder, so then to achieve that I would have to sell 40 houses a year or 3.3 per month. These are quick calcs to answer your question but seem about right. Do you consider them unreasonable? Oh and you can be sure I would charge more than your mechanic but not as much as your dentist. It would be cheaper for you for sure. Remember the Buyers Agent needs to be paid as well although the Buyer would cover that. Still your costs would be less and mine would be somewhat guaranteed. Could work…

Currently, if I recall correctly, the median houses sold in the industry by a REALTOR per month is about 1.5 or 18 a year.

#150 Dan in Victoria on 11.04.09 at 11:02 am

Post#149 DA .Thanks for the response,Fair enough.What value am I getting for the other $10,000?I understand totally where you are coming from.I’ve sold many, many houses over the years.
I too have education,liceneses,bonds,tickets,etc out the ying yang.The next step for me is engineering degree (Never happen LOL)But the fact of the matter is we will loose a job to another company for a hundred bucks.I also would like to charge a hundred bucks an hour.If everyone in my trade got together and said thats it, thats where its at, great we all make a hundred an hour.(Sort of like a set percentage Hmmmm…)
After almost 40 years of this though reality sets in, the market will dictate price,it goes up, it goes down.
The cream rises to the top.
Anyhow thats my 2 cents Good Luck,to you.

#151 conan on 11.04.09 at 12:03 pm

Re everything:

Real estate people provide a service.

The pay seems large but as the RE people who post here say… 9/10 RE agents fail in their first year.

The industry is up and down and when times are bad its probably 99/100 RE agents who fail in their first year.

Getting a RE agent is optional and going the discount broker route has been available since I can remember.

If I had alot of real estate to buy and sell I know I am using a (trusted) broker to do the leg work for me. I am using the services of RE people because they are cheaper then lawyers and I only pay if they succeed in doing what I want them to do.

I laugh at some of these online RE places. They all offer a deluxe package for people who want to give them money to bring in a real estate agent….llolooolllll

#152 Devil's Advocate on 11.04.09 at 12:41 pm

#150 Dan in Victoria

Remember Dan that if I charged $100.00 per hour under those conditions I am not actually earning a taxable $100.00 per hour. It would be more like $62.50 after minimum overhead expenses and I would have to sell more than twice the number of houses in a year as the average REALTOR does. If I didn’t sell a single house I would still have to pay that $60,000 per annum in overhead.

As for the other $10,000 that is charged to the Buyer by the Buyers Agent. How they charge for it it between them, unless they want it to come from the proceeds of the sale. In that case the would bring us a fee agreement and we would up the price of the home by the respective $10Gs (or what ever they agreed the Selling Agent was to be paid) plus applicable taxes.

The current system is really not far off. The only real fly in the ointment is the prophensity for the average REALTOR to take an overpriced listing that will never sell, incur expenses on behalf of that Seller they never will recoup and then subsequently look for a mark who’s house they can sell and earn enough profit from that at the end of th year the business has been a profitable venture for them.

The nice thing about the current system is… if your REALTOR fails you you don’t pay a cent. So there is obviously incentive for them to get the job done or that shinny new BMW is likely to be pulled from their parking spot when they aren’t looking.

#153 Chris no longer in England on 11.04.09 at 2:06 pm

I sold my house in England at the beginning of June this year and negotiated a cheaper rate with the agent I used (a national chain). I went through the contract and crossed out all the bits I didn’t like (notably a fixed fee of 2% of the listing price whether or not it eventually sold for that much). After haggling, we agreed on 1.65% of the eventual purchase price.

At this time, smaller local agents were going out of business as the market was drying up and only the national chains were surviving easily. They wanted my house on their books, so had to come to an arrangement over what I considered was extortion – even though it was a drop in the ocean compared to what Canadian agents want.

In the end it was a good move. We had to accept around $80,000 less than the house had been originally listed for – so imagine how relieved we were that the agent’s fee was 1.65% of the sale price and not 2% of the original price!

I haven’t bought anywhere here yet and when I do, it will hopefully be the last home I buy (or at least for a very long time). Should I ever come to sell, I will certainly try and favourable terms with whoever sells it for me. Everyone should try it – if we all do, it will become the norm.

As for the current FSBO sites, the prices of property on those are generally unrealistic. When property prices go down, these are the last to follow. If anyone can load up their details on the mls there will be some sharp differences in pricing but I imagine the DIY sellers will still be left languishing because of it. I think using an agent has to be better, BUT at a much more realistic fee. 6% is insane. I’d be expecting them to do everything for me at that price – including tidying up, cleaning the house, doing the laundry and walking the dogs.

#154 S. on 11.04.09 at 2:20 pm


Then something is really askew in Canada. A GP will see six patients per hour, average billing about $25.00 per visit. That’s $150.00 per hour after many years of university, and if they make a mistake someone can die. Specialists do a little better, but not all. Pediatrics in one example. The overhead… huge. Income taxes…half of what‘s left over after expenses. A potential doctor can save himself anywhere from six to sixteen years of university, become a realtor (that takes about six months) and make same coin? And get to sleep at night? Wow, where did I go wrong.

#155 tam on 11.04.09 at 3:07 pm

@149 “Given my education, experience and OVERHEAD costs (not accounting for billable expenses) I believe my time is worth well over $100.00 billable per hour but lets go with that.”

The day a house salesman says he’s worth well over $100 an hour is the day we know for sure we’re in one hell of a bubble. What should nurses, policemen, doctors, teachers and other, you know, important professions expect to earn if a salesman thinks he should be on that kind of money?

#156 Vancouver_Bear on 11.04.09 at 3:08 pm

#65 Devil’s Advocate on 11.03.09 at 10:14 am

Set the housing market free and it will regulate itself.
Do I need an agent to sell my car or buy groceries? You add NO VALUE. Parasites will always be parasites. Travel industry still alive after multiple internet websites offer the service so will MLS survive. Find a real job contributing to the society you live in and you will feel satisfied. I can only applaud to Competition Board decision to shut the cartel down!!!! Bravo!!!!

#157 conan on 11.04.09 at 5:01 pm

Re 156 and others

There is value in what RE sales people offer. The industy would not exist if they were not helpful in an important way.

Yes the internet is changing their industry but what is with the “pitch fork and burning torches” attitude against sales people?

If you do not work for the government your job is 100 percent dependent on the efforts of sales people.

#158 Devil's Advocate on 11.04.09 at 6:41 pm

Grass is always greener…

If it is so easy… quit what ever job it is you are doing and become a REALTOR. The barriers to getting in are minimal. Lasting 1, 2, 5, 10 or 20 years… now THAT takes a little more doing.

Gotta tell ya there are many a day that a 9 to 5 $25.00 an hour job looks pretty damn good to me. Especially in this failing economy and with all the B.S. we have to put up with from people who haven’t a clue what they are talking about. Hell I might even accept $15.00 an hour for freedom like that. With some benefits like medical, dental, retirement plan, paid holidays, company car I might take as low as minimum wage. Who am I kidding… I’d work for FREE under those conditions!

#159 Onemorething on 11.04.09 at 7:43 pm

Garth, just listened to Michael Levy on regarding VAN RE. Is this guy delusional???

#160 Jeff Smith on 11.05.09 at 10:00 am

Looks like Toronto wants to levy its own sales tax. I think this is on top of the 13% we already pay. Wow