Realtor 101

BITCHES modified

Are realtors redundant? Obsolete? With no redeeming economic value? (Other than buying Audis, of course.)

No doubt we’re moving in that direction, with more than 90% of buyers saying they conduct almost all of their property research online before ever dialing the dude from Re/Max with a juicy listing. Not far off is the publishing of Zillow-type info all over Canada (only in NS now) that gives buyers even more of the good stuff – past sales figures, price adjustments, days on market, property tax history etc. That’s a certainty since the Toronto Real Estate Board was reamed by the federal competition cop.

Already, FSBOs can throw a few bucks to a discount real estate outfit and end up on MLS, thus negating one of the big advantages realtors used to enjoy. It’s also common to apply for a mortgage online – even the big banks offer that service. So, what does anybody need a “real estate professional” for, besides giving you a promotional pen and telling you to initial inside all the little circles?

Well, there are reasons, even if they’re dwindling. Smart buyers will always have an agent representing them – who can pull up neighbourhood ‘sold’ comparables you don’t have access to, who see new listings two or three days before they make it onto realtor.ca, who specialize in a certain hood and can alert you to issues (“…the guy who bought number 112 is a neo-Nazi with a Hummer…”) and who can assist during the offer-writing and negotiating phase, especially if there are multiple offers or you’re trying to buy from a dork.

For sellers, an experienced agent sure helps in setting the right price, which is where most FSBOs fail (almost all are greedy, which is why they DIY). They can ‘shop’ an offer when one arrives to try and drum up competitive bids, stage agent open houses for maximum exposure, show your property day or night, vet potential buyers and ensure they don’t steal underwear during visits. Be a good client, and you also might get a Royal LePage calendar.

Having said this, there are 109,000 real estate agents in Canada with more continuously joining the ranks after a grueling few weeks of quasi-training. Many are duds. Choose wisely. And be very careful about what documentation you sign.

For buyers, that means no BRA, or at least one which is severely restricted. The Buyer Representation Agreement may seem harmless, and the buyer-agent you engage may insist upon it, but beware. There are several instances in which you could end up being liable for paying commission on a purchase, or even having to fork over big bucks for a deal the agent was never involved in.

Either refuse to sign a BRA, or do it only in connection with an offer. Then make the location on the front page very specific. The agent might just write in “Toronto” or “Edmonton”, but instead replace that with the address of the house you’re going after – and for a specific, short period of time. Like two days, during which sign-backs may occur. Without that protection you could end up with a nasty surprise if you happen to buy another house even miles and months distant, without the help of that agent.

For sellers, resist any realtor’s attempt to fill out and sign a property disclosure form. In Ontario it’s called the SPIS, in Nova Scotia the PCDS, in Alberta and BC the PDS. These are toxic, which you can easily tell because lawyers love ‘em.

The idea is that a homeowner discloses every wart and defect giving potential purchasers full disclosure. In actual fact, this protects the realtor’s butt, since it’s actually his job (not yours) to ensure the property is fairly and completely presented to any potential buyer. The disclosure form can cause big problems, and has resulted in hundreds of lawsuits, because it’s vague, open-ended, complicated and imprecise. If, for example, you declare you’re not aware of water problems in the basement or defects in the roof, then a big storm floods the place, you have a legal problem. This would be despite any due diligence the buyer did on his own, including a home inspection.

You don’t need to fill out a disclosure form. Nobody can force you to do so. It won’t affect the marketing of your property, the price or in any way deter a buyer. The last thing you should do as a seller is declare your place is perfect, when in fact you have no idea what’s about to fall off, who’s buried under the basement or what’s ready to go bust in the night. Why court the hassle?

In short, realtors are just like bad dogs. Lovable when leashed.

119 comments ↓

#1 bdwy sktrn on 07.20.16 at 5:34 pm

(mark) “Readers of Greaterfool and people who have studied the statistics have known for years that prices on identical houses stopped rising in 2013 in response to Flaherty’s subprime crackdown.”
—————————-
only our loveable mark can get predictions wrong, even years after the event passes.

was looking at all the solds on my street, one came up twice. same house, no renos.

26 months ago sold 1.4 (may 2014)
last week sold 2.3

avg lot , avg hood (but not west side), avg house

stick to your pedantic fancy words, keep away from math and numbers dude.

still bidding wars on all non stupid places here in comm dr.

#2 Randy on 07.20.16 at 5:37 pm

If the RE Bubble starts to deflate with they blame Harper ?

#3 Mike in Toronto on 07.20.16 at 5:59 pm

#2 “If the RE Bubble starts to deflate with they blame Harper ?”

I already do. 2008. The market was correcting, then we had bailouts, emergency interest rates, 40 year mortgages and no money down.

It’s been gas on the fire ever since.

He may not have done it himself (he was sure to not get his hands dirty on anything) but he ruled with an iron fist.

https://www.thestar.com/life/homes/2008/01/09/40year_mortgages_have_arrived.html

How cute, they’re talking about $375k houses…

#4 The Dude on 07.20.16 at 6:04 pm

Still plenty of good jobs left in Vancouver:
https://www.workbc.ca/Jobs-Careers/Find-Jobs/Jobs/Job-Posting.aspx?jobid=311207&from=search

#5 TnT on 07.20.16 at 6:06 pm

Hey Garth

Seems like no one is safe from being Uber’d out of a job.

I’m trying my best to ascertain a human financial adviser over a robovisor.

In extreme anomalies like we’re in these days (people buying Bonds for capital gains and Stocks for yields) does it take a human to better navigate these markets?

#6 Vundo on 07.20.16 at 6:07 pm

https://www.thebeaverton.com/business/item/2362-underemployed-millenial-not-particularly-worried-about-housing-bubble

#7 bdwy sktrn on 07.20.16 at 6:08 pm

#3 Mike in Toronto on 07.20.16 at 5:59 pm
https://www.thestar.com/life/homes/2008/01/09/40year_mortgages_have_arrived.html

How cute, they’re talking about $375k houses…
——————-
from your link, talking about cute!

Will Dunning, a housing economist in Toronto, believes Canadians “borrow conservatively, especially for homes,” and there’s no danger yet of Canada heading down the same road as the U.S.

“The mortgage arrears rate is remarkably low,” he says. “It’s the lowest in a decade.”
————————–

#8 Metaxa on 07.20.16 at 6:10 pm

Being an old I truly remember when a real estate sales person was an older, semi-retired person who maybe worked part time at the hardware store but everyone in town knew he or she loved showing homes (hobby, avocation but not profession)so they sent anyone who asked over to see Harry at the hardware.

Then along came Century 21. Gold jackets and all.

Look where we are now…

#9 Shawn on 07.20.16 at 6:11 pm

Nothing is Perfect…

Except Garth?

#10 sunshine on 07.20.16 at 6:18 pm

In short, realtors are just like bad dogs. Lovable when leashed.

=====

You are funny, Garth.

Ideologically you preach the Hillary\Rubio tired narratives, speaking Trump’s populist talk.

Lovable when displayed at the cashier’s checkout.

Where are the sunshine girl pics?

#11 bdwy sktrn on 07.20.16 at 6:28 pm

“26 months ago sold 1.4 (may 2014)
last week sold 2.3”
—————-
this makes a new highwater mark for lowly east van imo.

some standard size lots of 33′ are now going for over 2m with a decent old house. this was unheard of at the start of the year.

i was very close to buying a bigger lot/house to rent out here for 800k about 4 years ago. i expected to subsidize it 500/mo after rent.

would have put about 24k into it (other than 20% down) over 4 years.

it has appreciated well over 1m since.

sadly i failed an easy herdonomics test on that one.
—————

#12 Joe on 07.20.16 at 6:36 pm

Just came from my Lawyers in North Van.
He said they are insanely busy doing RE deals.

#13 mitzerboy aka queencitykid on 07.20.16 at 6:43 pm

thx for the heads up on realtors stuff garth

#14 America's Moist Wanted on 07.20.16 at 6:51 pm

I hate to say it but I always get way more value from a lawyer than a Real Estate Agent on property transactions, so much so that I have bypassed the REA on my last few activities. I pay the lawyer hundreds of $ to ensure the property is ultimately mine or the deal is properly closed and the transaction is handled correctly. The REA gets thousands of $ to tell me the time with my own watch. The REAs must be getting worried as evidenced by the desperate ads they put on TV.

#15 Chaddywack on 07.20.16 at 6:59 pm

Back in the days when I was considering buying I went through 3 Realtors. I found all of them terrible. None of them did extra legwork for me and most homes I found on my own. Made offers but never bought (big mistake in vancouver in retrospect). Anyone know how to find a good one. They all seem to be bad.

#16 Denise#1 on 07.20.16 at 6:59 pm

Thanks for the information regarding Property Disclosure Forms. Made me feel vindicated for a decision I made about 18 years ago. A sibling and I were executors of our mother’s estate. We both had to sign everything, 2 signatures. When we were selling our Mother’s house, our realtor wanted us to sign a Property Disclosure Form. He made it sound like a prerequisite. My sibling said “OK”. I said “No way am I signing that thing. I haven’t lived in this house in over 20 years. Why on earth would I do something so stupid?” The realtor wasn’t thrilled with me :). I couldn’t have cared less. Anyways, thanks Garth!

#17 Ray Skunk on 07.20.16 at 7:04 pm

Surely with the proliferation of RE agents in this day and age, we all know a Realtor who is either family or a close friend and will not make us sign a BRA/give us some kind of financial break/do us a solid?

There are something like 39k Realtors in Toronto alone – which makes me wonder who doesn’t know one personally and picks theirs from an ad on a bus shelter?

#18 S.Bby on 07.20.16 at 7:20 pm

#12 Joe
You mean foreclosures?

#19 Jas on 07.20.16 at 7:21 pm

Garth:
Very good advice indeed.
I thought the disclosure is mandatory if you live in the house and is optional if it is a rental place.
thanks

#20 Millenial on 07.20.16 at 7:22 pm

s&p500 to 2500!!! buy! buy! Buy!!

lulz

#21 S.Bby on 07.20.16 at 7:22 pm

#11 Bdwy Sktrn
You have started quoting yourself now?

#22 Tim on 07.20.16 at 7:24 pm

You say Vancouver is not driven by offshore buying, yet how else can you explain that it is far more expensive than any other market in Canada? It can’t just be the Ocean and mountains. This article explains the influence of offshore buying in Vancouver:
http://thetyee.ca/Opinion/2016/07/12/Chinese-Buyers-Vancouver-Home-Prices/

#23 Annek on 07.20.16 at 7:26 pm

I believe real estate agents can be very useful, as you have outlined in your blog. However, the commissions that they make are outrageous.
Their commissions should be a flat rate fee rather an a percentage.
For example , when houses are more expensive because of a crazy demand, does that mean the agent deserves more money?
For example, the work involved in selling a house is the same when houses were 30% less . In fact, when home prices were on the rise, I am sure that it was much less work for an agent because the homes would be sold in days, rather than weeks or months due to demand.
I don’t believe agents deserve these huge commissions.
Their fees need to be reasonable.

#24 Protea on 07.20.16 at 7:27 pm

Chinese Media Is Now Warning Canada’s Housing Crash Will Be Worse than the US

Getting interesting when the major News networks in China are concerned about the Canadian
Economy and real estate bubble!!

https://betterdwelling.com/city/vancouver/chinese-media-now-warning-canadas-housing-crash-will-worse-us/

#25 Nelley on 07.20.16 at 7:33 pm

RE agents can sometimes make you a lot of money (sometimes) in the selling of your property-depends on a lot of factors. In the purchase of a property, their usefulness isn’t nearly as great anymore with the continuing info proliferation.

#26 46 and 2 on 07.20.16 at 7:43 pm

Wonder what #10 sunshine does for a living.

#27 Joe Schmoe on 07.20.16 at 7:45 pm

#14 America’s Moist Wanted

Totally agree with you…good lawyer trumps the RE Agent.

I managed 5/7 house transactions without RE agent involvement since 2001.

I think we have generally acknowledged that hormones are the primary driver in RE decision making.

RE Agents are good at keeping some emotions out of it ie getting offended that someone hates my pearl pink sink.

But the overall objectivity seems to have gone out the window with the greed.

Paying someone $50K to do the same thing they did for $15K 8 years ago seems insane.

#28 Heisenberg on 07.20.16 at 7:48 pm

Thanks for today’s post Garth.
Solid RE advice!

#29 WUL on 07.20.16 at 7:53 pm

On realtors, my wife and I have purchased 5 homes and sold 4 in the Stampede City. Of the nine transactions, we used one realtor for 8. She was great. Steadfast, knowledgeable, hardworking, honest and cheerful. Simply find a good one.

On real estate, I noted the article today on one and two bedroom apartment rental rates in HuffPo Canada. It looked at the 25 most populous cities reaching downward to Sherbrooke and Saguenay, Quebec (pop. ~130,000). Of course on the podium were Vancouver, Toronto and Calgary in that order. By my reckoning and tracking the rental market, had they looked at Fort Mac (pop. ~80,000), it would have placed above Toronto and below Vancouver.

Somewhat related to housing costs, I saw that another commenter said the other day that Ottawa had the highest household income in the country. I checked some stats and it seems that Ottawa does score very well on that count. I was impressed, however it is about 4/7ths that of Ft. Mac households.

#30 Jimmy on 07.20.16 at 8:08 pm

I called up the Texas number.
Guy who answered said talk to the wife :)

#31 BRA = Death Trap on 07.20.16 at 8:18 pm

Oh man, I got suckered into singing one of these beauties, just plain awful! The agent slipped it in, I stupidly signed it and regretted it for the whole term of the agreement. Wow, I have learned, never, ever, sign one of these, unless you like the feeling of your foot caught in a steal bear trap!

#32 crowdedelevatorfartz on 07.20.16 at 8:32 pm

Alas Devil’s Advocate will bore us (boar us?) with his admonitions that “if only we stupid, uniformed, plebes understood what a Real Estate professional actually does for our benefit……”
We wouldnt talk such blasphemous foolishness.
Ironic coming from a Lawyer for the Devil.

#33 AB Boxster on 07.20.16 at 8:46 pm

2 storey on our street.
Couple talked to several experienced local agents on the right listing price.
No estimates over 440K.
Couple listed with discount realty for 485K, got 484K.

They got 40 k over RE expert estimate.
Know your own market. Save a ton.

#34 sunshine on 07.20.16 at 9:01 pm

Wonder what #10 sunshine does for a living.

====

Jackpot winner. Living the dream. Soaking in the sunshine. Reading silly serious things. Writing silly comments. Studying Franz Kafka’s influence on the books, written by George Soros. Practicing the art of Zen. Chasing local girls. Checking the miraculous growth of account balances. Learning to understand the songs of the birds. Practicing to be a better person. May I offer to send you the most important energy a human needs: love? Absolutely free of charge and free of advice how to spend it.

#35 acdel on 07.20.16 at 9:04 pm

Great advice Garth, thanks.

#36 common sense on 07.20.16 at 9:34 pm

Well, well, well…

According to Lee Adler (sorry link not available) the US CPI numbers are starting to hit and exceed the FED’s target for interest rate hikes. AND these number DO NOT take into account a 11% rise in rental rates, 6.3% raise in house prices and other plus 2% finished goods inflation, etc.

Once again it looks like time for the FED to RAISE RATES (Garth called it).

Can they do it? And when?

#37 Editrix on 07.20.16 at 9:35 pm

Sorry, Garth. Few real estate agents will “alert you to issues.” They just want that sale. When I was looking at a house in Cobourg, with all the level crossings, the agent told me that the train horns in the middle of the night would lull me to sleep. If there’s an issue in a neighbourhood, the agent will put a positive spin on it or hope that the non-stop party three doors down is taking a break when he/she shows the house.

#38 Joe on 07.20.16 at 9:41 pm

12-S Bby
No purchases still very busy.

Anyone notice Canadian Bonds going negative today?

#39 Willy H on 07.20.16 at 9:59 pm

Most real estate agents are worthless. Particularly the vanity realtors with their face plastered all over billboards and bus shelters. They are concerned more with the volume of sales closed than good customer service. We have dealt with one such animal when we sold our first home.

I don’t trust them to act as my agent behind closed doors because I believe that they collude with their colleagues and I would never rely on them to vet the neighbourhood I might chose to live in. They focus on the the commission and turnover. What’s best for buyers and sellers is of little concern. That why BRA’s are so popular.

Most fail to do the most basic due diligence for perspective buyers and sellers.

Most buyers like your articles states do all the research themselves. Prior to online listing the realtor had to bust their ass to take clients to listings. Those days are long gone. House Porn is so popular that many folks are actually more educated than their BMW driving realtor.

Title insurance the first step to ending this cartel. In fact, other forms of insurance may come into existence that would protect buyers and sellers creating all the conditions for realtor extinction event. Let’s hope!

#40 Rural Rick on 07.20.16 at 10:01 pm

Moved back home from 8 hours away. Trucks unloaded all moved in. The couple we were buying off were feuding so bad they could not agree on a lawyer to hold the cash from the sale of the house. Now I am really farked. I got the money but I have to have some one to give it to to complete the sale. My real estate agent went to each of them and told them they were using his lawyer, period. A good one is well worth it when stuff goes sideways on you.

#41 Happening now on 07.20.16 at 10:02 pm

Right now I’m sat in Urban Fair, Yaletown, Vancouver listening to a young realtor talking to a Asian female regards listing her condo. …..he’s explaining that right now things have slowed down a bit, instead of 7-8 offers, places are only getting 2 or 3 and close to market value not above. He said before people would list lower and get above asking multiple offers but not now….he’s hoping it’s a one month thing but is waiting on July data…..quite interesting to listen in on this !!

#42 ww1 on 07.20.16 at 10:05 pm

#35 Editrix on 07.20.16 at 9:35 pm
Sorry, Garth. Few real estate agents will “alert you to issues.” They just want that sale. When I was looking at a house in Cobourg, with all the level crossings, the agent told me that the train horns in the middle of the night would lull me to sleep. If there’s an issue in a neighbourhood, the agent will put a positive spin on it or hope that the non-stop party three doors down is taking a break when he/she shows the house.

Seems like it’s time for a little lesson in contract law. Surprise! Both the listing agent and “your” selling agent work for the vendor under contract law.

Neither work you!

The vendor is paying their fees and that’s who they have legal obligations to. No matter how nice they are to you, the Starbucks coffee the provide, or their bonding with your family.

So when you say “they just want the sale” that’s true. And ethically they want the best sale for the seller’s interests. Not yours.

Okay .. we all know they will push you both into any deal to get their commission. If someone else closes the deal the get $0. But the law puts them on the seller’s side in any Canadian retail situation.

(and don’t get me started on the lack of a sliding scale as prices go up in Canada .. except maybe BC?)

#43 wallflower on 07.20.16 at 10:17 pm

The ones in C4 are scraping the bottom of their barrel. Crazy increases in the numbers of listings with the chinese 88 in the price number.

#44 White Crock BC on 07.20.16 at 10:39 pm

My best RE experience ever was selling my place by myself and using a lawyer to make sure the “Ts” were crossed etc.

Any time we have used an RA, we are constantly correcting typos in the listing etc.

It’s like they look up your last listing, cut and paste.

Completely useless, like home inspectors.

#45 BOOM! on 07.20.16 at 10:43 pm

Having bought 6 homes, from WI to NY, and back to WI we have always used both a Realtor, as well as a lawyer (when buying).

Some were full commission 6%, some were the discount kind 3%. All were good, no home had “surprises” and none had an inspection on my behalf as the buyer. One did have an FNMA inspection because we used their financing, but there were no major issues.
I think 2 had inspections by the buyer, and all passed.

I do believe when buying a ‘used house’, or a ‘used car’ the term Caveat Emptor FULLY applies!

Buying in an overheated market, whether it be cars, real estate, or investments the term Caveat Emptor – Let the Buyer BEWARE!!! – is an idea no buyer can ‘afford’ to ignore, or treat lightly!

Boom Out!

M64WI

#46 WUL on 07.20.16 at 10:50 pm

Somewhat off topic, but yet, I contend the comment below touches on real estate, or as we legal beagles call it, “corporeal hereditaments”.

Played the Fort McMurray Golf Club the other day. A lovely little track along the banks of the mighty Athabasca River.

Of course I nailed numerous snap hooks and serious slices into the blackened trees that line the fairways (it ain’t Glen Abbey after the fire) and as we trudged through the gorse we found numerous half melted Titleist ProV1’s.

Those found melted balls do not fly very well and they roll piss poor on the greens.

#47 Trojan House on 07.20.16 at 10:50 pm

#40 ww1 on 07.20.16 at 10:05 pm

True…unless the buyer signs a Buyer Representation Agreement.

Unfortunately, people also don’t understand how a contract can be implied. So be careful when talking with an agent that you don’t ask any questions looking for advice.

#48 Smoking Man on 07.20.16 at 10:55 pm

Why did the girly version of Ghost Busters Flop? Same reason chic’s dig stainless steal fridges.

Boys and Girls are wired differently, in each man lies a goof, a stupid goof, in my case an absolute idiot goof. Yet I have quite the following. Shy on gf but tones and tones of positive emails. Never had a really bad one yet.

Girls and Woman are not stupid goofs. They are cunning, calculating and wicked if you get on there wrong side, heaven help a women’s rival if she fits in a smaller dress size or has a better stainless steel fridge.

Most woman will never show their hand, it’s all about presentation, sugar and spice and everything nice before they stab the dagger in a rivals heart. Lesbians’ are stupid, they will let you know the knife is coming well in advance giving time to prepare a defense.

4 grown woman acting goofy, killing ghosts is to fictional for even the most acid freaks of fiction. It’s not even believable to both men and woman.

It’s wrong on all levels. Only men can get away with being the goof.

Woman know it, as do men, a natural instinct if you will. Boys bond with boys by being goofs. Girls don’t.

That’s why it boomed as I predicted.

Yet the cultural mind fking happing all around us (Climate Change, Black vs White, Chic’s vs Dudes, Gun grabbers, etc etc) all an effort to promote a borderless one world govt, equality for all these dreamers, its a noble effort for people without forward vision.

Lets say the goal was achieved, can you imagen if Erdogan was in charge. The guy who faked the Coup to totally consolidate power.

Dr Smoking Man
Phd Herdonomics

#49 Bottoms_Up on 07.20.16 at 11:05 pm

#22 Annek on 07.20.16 at 7:26 pm
——————————-
Under normal conditions, houses appreciate at the rate of inflation, which means realtors compensation increases over the years at the rate of inflation.

And they only earn 1/4 of the commission. If the full commission is $20,000 (5% on a $400,000 sale), $5,000 goes each to the buying and selling agent, as well as to the buying and selling brokerages.

And how much tax would you pay on $5,000? They might be in a 40% tax bracket. So one sale nets them $3,000, less personal expenses.

How long does it take you to make $3,000? How much effort might an agent put in to get that sale?

#50 Joe2.0 on 07.20.16 at 11:09 pm

#23 Protea

I think that the Chinese government is trying to slow down the exodus of cash via fear mongering.

#51 James Duncan-Smyth on 07.20.16 at 11:17 pm

Excellent advice on real estate contracts and the agents that peddle them. A buyer and seller should always keep the upper hand and their wits about them.

Meanwhile, since we’re telling the truth today, look at how badly boned the millennials are getting after being hoodwinked by the Trudeau Liberal propaganda Machine.

http://business.financialpost.com/fp-comment/%E2%80%8Btrudeau-vs-canadas-youth%E2%80%8B-young-canadians-are-the-big-losers-under-liberal-government

Big lesson here, don’t believe anything you read on the internet. Social media is not a substitute for intellect.

#52 Corban on 07.20.16 at 11:21 pm

The more you know!

Thanks for the balanced journalism, Garth :D

#53 Unumizer on 07.20.16 at 11:22 pm

Garth, how do we stop this. I was interested in looking at a new home. I contacted the listing realtor and he refused to show me the home unless I would sign the agreement. He would already get the listing commission but wanted both. I think that was highly unethical.

#54 For those about to flop... on 07.20.16 at 11:28 pm

Well, my wife just informed me that that beater house that a couple of us were laughing at the other day with the ugly kitchen ,100 years old and all that…sold.

They were asking 1.2 and most likely got it ,as they would have had no need to accept a low offer right out of the gates.

A developer will build new and ask 2.5.

This thing has more legs than a spider in Chernobyl…

M42BC

#55 Keith in Calgary on 07.20.16 at 11:31 pm

“Realtots” are human trash.

Plain and simple. They serve no purpose and bring no value to the table, and they know it. This is why their respective RE boards fight the competition bureau.

They are one of the most disgusting forms of humanity to walk the earth. Pond scum.

When I sold Mercedes-Benz for 8 years they would occasionally would come into the showroom and once I found out what they did I’d just drop them like a rock. Literally, leave them standing in the middle of the showroom, while I walked away and did something worthwhile.

#56 Fustercluck on 07.20.16 at 11:50 pm

We can only hope that a byproduct of a pricing correction will be the overdue cleansing of realtor practices. If we’re lucky, a full scale paradigm shift in the way the industry is regulated.

My new favourite is when a purchasing realtor adds their signage to the sold sign, “Attention everyone, I just encouraged my buyer to overpay for this very property!”

I digress. Gonna go grab a coffee, hopefully Timmies has a big sign that I can strap to my hood to proclaim self-congratulations to the world about my coffee purchase.

#57 ww1 on 07.20.16 at 11:59 pm

#45 Trojan House on 07.20.16 at 10:50 pm
True…unless the buyer signs a Buyer Representation Agreement

True.

Very good advice to people thinking that maybe they don’t want to be the “greater fool”.

Want to gamble on how many RE searching people even get told about that choice?

#58 El Presidente Trump on 07.21.16 at 12:07 am

Lord Black is pretty pumped for me.. he knows a WINNER.

http://www.spectator.co.uk/2016/07/the-brilliant-donald-trump-deserves-to-win/

#59 blobby on 07.21.16 at 12:32 am

I wish your blog archived advice like this in easily searchable tabs..

I.e. “click here if you’re hiring a realtor”, “click here if you’re about to invest in something”, etc etc.

I’ve read this, soaked it up, but by time i ever need a realtor, i’d have forgotten most of it :(

#60 fruitypunk on 07.21.16 at 12:36 am

Instead, meet the letter carrier in the neighbourhood, and find out about that house on the corner that has an $80,000 pickup in the driveway and yet gets welfare cheques. Hmm. I wonder how that happened?

#61 NEVER GIVE UP on 07.21.16 at 1:15 am

WE are a sovereign nation.

Our people are hurting from influences outside our country and other factors.

Our government can do anything it wants to halt the foreign influence in any area in Canada. Simply make no go zones where we do not want real estate investment.

Government can do anything it wants. Why not slice up areas that are negatively influenced and tell foreigners we want investment mostly in business operations and in provinces that have stagnant real estate markets.

And if those new markets become inflated then change again.

Our people are hurting and our Government does not care.

Sometimes its not all about the money.

#62 NEVER GIVE UP on 07.21.16 at 1:18 am

90,000 properties or about 5% of the housing stock of Brisbane Australia is empty due to foreign buyers purchasing for a buy and hold strategy.

#63 FinanciallyIlliterate on 07.21.16 at 1:24 am

Hi Garth,

I sometimes have a minute to read your blog between diaper changes (not my own diapers). Can you explain what it means in the cbc article that cibc sells negative bond yields for the first time. Is that like a new flavour of ice cream at Dairy Queen? Worth trying? I don’t get it. Then again, my savings consists of the remaining balance on my credit line…
Thanks for the effort.

#64 NEVER GIVE UP on 07.21.16 at 1:25 am

#53 Keith in Calgary on 07.20.16 at 11:31 pm
“Realtots” are human trash.
——————————————————–
Again another point where I disagree with our esteemed blog owner.
If my experience with human greed is any gauge, then I would say no realtor worth his salt is going to alert a buyer of a potential bad neighbor or anything negative that could jeopardize his or her commission.

I would rather be unguided with all the stats open and transparent and on my computer and do my own investigation on a property rather than trust using a real estate “professional”.

The nicer they are the more I do not trust them.

#65 Aggregator on 07.21.16 at 1:36 am

Risk of speculation in Toronto condos mitigated by presales: CMHC

Most Toronto condominium projects do not begin construction until 70 per cent of units are sold, curbing the risk of speculation, Canada’s housing agency said on Tuesday in a report that suggested overbuilding fears may be overdone.

Just wow. After the largest developer in Canada just defaulted and is about to stiff many buyers on their deposits and homes, CMHC comes rushing in with a propaganda piece on BNN to restore market confidence. As if.

No CMHC. Presales do not mitigate risk. In fact presales are more levered then subprime mortgages. And here we see some young CMHC analyst saying.. Oh, why yes… it is speculation if you buy a presale. We don't deny that.

Firstly, it doesn't matter what percentage of units the developer sells. What matters is the credit quality of buyers. In the US developers were selling entire neighborhood projects to speculators. We seen how that ended.

Secondly, if the developer has to structure a buyer's deposit over the course of 1-3 years (most contracts are done this way), is that not a warning sign indicating the buyer has no money to cover potential losses? Most presale buyers are there for the leverage and not even fully approved for a mortgage for when the unit is complete. The intention is to assign it to an end-buyer before occupancy. That's the presale game and what the media rarely shows you. Instead they have some story about a couple with kids who lost money.. blah blah blah.

Lastly, what CMHC forgot to tell you is that they insure many developer projects and encourage presales. The idea is by adding speculators between the developer and the end-user it can enhance market liquidity and price discovery, but what it really does it is inflate prices (which contradicts CMHC's housing affordability mandate), create more leverage, volatility and risk. Hong Kong developed this new system of presales prior to 1997, and here's an annotated graph of what happened. (PDF)

CMHC is the biggest elephant in the room, and nobody is saying anything.

#66 Ponzius Pilatus on 07.21.16 at 2:24 am

#12 Joe on 07.20.16 at 6:36 pm
Just came from my Lawyers in North Van.
He said they are insanely busy doing RE deals.
————–
87 sales today in all of the Lower Mainland!
Better get a new lawyer.

#67 Ponzius Pilatus on 07.21.16 at 2:33 am

Garth,
Good old fashioned Realtor bashing.
Love it!

#68 PDS in BC on 07.21.16 at 4:52 am

In BC, the phrase ‘Are you aware…’ on the PDS is taken to mean the present tense. A negative answer does not mean that there has not been a problem in the past or that a past problem will not recur.

The PDS does not call upon a vendor to warrant a certain state of affairs. It requires the vendor to say no more than he or she is or is not AWARE of a problem.

Buyers should be advised to obtain an independent inspection, even if a PDS exists and is incorporated into the contract.

BC courts have recognized the PDS for what it was designed to be; a tool to provide information about property to prospective purchasers. Where sellers establish they have answered the PDS honestly, to the best of their knowledge, claims against them are dismissed. Our courts have consistently held that absent fraud, completion of the PDS will not usurp the doctrine of caveat emptor, or relieve buyers of their obligation to investigate property they propose to purchase.

#69 Make America White Again? on 07.21.16 at 7:49 am

For all you Trump bootlickers here, Ted Cruz just cost Donald the election.

News this morning that of 2,472 delegates at the RNC, 18 are black.

18.

What are you REALLY supporting?

#70 crowdedelevatorfartz on 07.21.16 at 8:07 am

@#46 Dr. Smoking Mensch
Stick to drunken babbling.
Your thesis on men vs women is….well….kinda like the lastest version of Ghostbusters…….lame.

#71 fancy_pants on 07.21.16 at 8:11 am

RE Agents are not worth the $ they make. The lawyers are worth every penny. The only thing the Agents have in their corner is the MLS or they would be obsolete. bring on an open Zillow type system

#72 WalMark of Sadkatoon on 07.21.16 at 8:23 am

funny that ppl think lawyers aren’t sales ppl like realtors. the best lawyers are some of the best sales ppl and can sell you your own shirt off your back

#73 Ace Goodheart on 07.21.16 at 8:43 am

Agents are useful in the Toronto market for purchasing houses. This is due to the problem we have right now, with there being not enough houses to satisfy the demand. It is useful to be able to send someone in to put in your offer, with the 20 or 30 other people who are also offering.

However, I have noted a disturbing trend of realtors advertising to the effect that it is necessary to have a realtor so as to avoid legal problems, or to be sure that your agreement of purchase and sale is drafted correctly.

People should always remember, a realtor cannot practice law, and really should not, as they have no idea what they are doing. If they are telling you that you need them so as to avoid being sued, then that is a problem. You need a good, experienced real estate lawyer, to avoid being sued.

The real estate lawyer is actually much cheaper than the realtor.

I really think that people who are getting themselves involved in these heated bidding wars, and signing contracts “on the fly” with the legal advice of a realtor, who has taken a 2 month course, are putting themselves in a lot of danger. Really, if the situation is such that the contract must be signed immediately to avoid losing the bidding war, bring your lawyer with you.

“The real estate lawyer is actually much cheaper than the realtor.” Really? A buyer-agent costs you nothing. Not so much with a lawyer, who is not needed to draft an offer. — Garth

#74 Jeena Beckman on 07.21.16 at 8:46 am

DELETED

#75 BOOM! on 07.21.16 at 8:47 am

#46 Smokin Man

Do not try to explain differences between the sexes. You show you are totally clueless in that realm.

#76 El Presidente Trump on 07.21.16 at 9:00 am

The whole universe should be thanking me for taking out preacher man crazy canuck Cruz…. what a total LOSER….. you want wwIII… Cruz is your man.. that Dude is howl at the moon cracker dogs. You are welcome… now build that WALL.

#77 Penny Henny on 07.21.16 at 9:21 am

Garth says that FSBO are greedy people and that Realtors have an ability to “‘shop’ an offer when one arrives to try and drum up competitive bids”.
It seems to me that in both instances the seller benefits from getting the best deal for THEM.
Does this make someone greedy?
Are you greedy if you try to sell your car privately?
Is calling someone greedy a attempt to shame them for keeping more of their money in their pocket?

I think not.

FSBOs self-sell in order to save paying commission. Do they pass any of that saving on to the buyer? Nope. Greedy. — Garth

#78 Bat Flipper on 07.21.16 at 9:34 am

A future for a real estate agent? Grim. The masses will soon be buying homes without ever seeing the paint.

Who has the time to drive around town looking at real estate and making offers on multiple homes? It could take 10 to 20 offers and many, many weekends to get an offer accepted.

Many buyers would rather buy a home like they buy a box of Huggies on Amazon. Log in, look, make an offer, and wait. All without putting clothes on.

With a pre-populated form submission, your mortgage could be completed as well. Home bought and mortgage approved all within a few hours with the genius that is technology.

Many people spend billions on stocks of companies without ever seeing the actual company. Why not housing?

Just like the self-driving car, plenty of industries will be out of work in the next 5-10 years. Soon, we will all be working as sales people for those blossoming MLM firms.

#79 Smoking Man on 07.21.16 at 9:54 am

#73 BOOM! on 07.21.16 at 8:47 am
#46 Smokin Man

Do not try to explain differences between the sexes. You show you are totally clueless in that realm.
…………….

Damn your right, In the animal world there are distinct characteristics that define Males and Females.

Yes The Human Supremacist have evolved past those unique characteristics.

Clueless me. Yes I should follow PC doctrine going forward to avoid insults.

But then, I like Insults.

#80 Mr. Frugal on 07.21.16 at 10:04 am

#67 Make America White Again? on 07.21.16 at 7:49 am
For all you Trump bootlickers here, Ted Cruz just cost Donald the election.

News this morning that of 2,472 delegates at the RNC, 18 are black.

18.

What are you REALLY supporting?

+++++++++++++++++++++++++++

Your racist comments are not appreciated.

#81 boomer88 on 07.21.16 at 10:19 am

Mario Draghi just hinted that ECB’s money printers might backstop European banks and their bad loans. ECB prints $90B/mth and buys corporate/government bonds, Bank of Japan prints trillions and buys Japanese stocks, bonds, everything.. (BoJ is top 10 holders in most Nikkei 500 companies). Are we living in normal times? You can print trillions and buy the entire stock market?? Should you be not concerned about anything when you’re an investor?

The bottom line is that Central Bankers have committed to complete destruction of money and savers. You can rest assured that they will print like crazy and will backstop any market slide if it happens.

We are not living in normal times, real estate bubble in Canada is just a byproduct of Zero Interest policy.

I’m mortgage free house owner, but I’m getting increasingly scared that the money I have is getting worthless and it’s a very uneasy feeling watching everything go up. I pulled out of the market couple of years ago because I thought both bonds and stocks were in a bubble, but now I think we might just explode in hyperinflation.

The reset will happen one day, but who knows, we maybe years away from it. There is no easy answer what to do. I still think though, that when the reset comes it will be better to own tangible assets like house, because paper assets may evaporate quickly.

#82 46 and 2 on 07.21.16 at 10:19 am

#53 Keith in YYC

I do exactly the same thing with lawyers. If i find out during the course of the selling/buying back and forth conversation that the prospective customer is a lawyer I stop the whole thing is it’s tracks and simply say (in the nicest way possible) that my personal policy is to not sell any of my products to lawyers. Even if I need the sale, I will not sell to any lawyer. I have the same attitude towards Hutterites….I swear that if I find out that that potato at the farmers market is off a colony I will not buy it. Along with Realtors the above mentioned are basically parasites.

#83 Mr. Frugal on 07.21.16 at 10:19 am

#77 Smoking Man on 07.21.16 at 9:54 am
#73 BOOM! on 07.21.16 at 8:47 am
#46 Smokin Man

Do not try to explain differences between the sexes. You show you are totally clueless in that realm.
…………….

Damn your right, In the animal world there are distinct characteristics that define Males and Females.

Yes The Human Supremacist have evolved past those unique characteristics.

Clueless me. Yes I should follow PC doctrine going forward to avoid insults.

But then, I like Insults.

+++++++++++++++++++++++++++++

Hooray for the differences between a woman and a man.

https://youtu.be/zXsLW8EK5_8

#84 Ole Doberman on 07.21.16 at 10:24 am

Looks like after a $200K reduction the crack shack is still on the market:

http://www.rew.ca/properties/R2088271/2348-oliver-crescent-vancouver

I thought these things get line ups and multiple offers over asking?

#85 Social Distortion on 07.21.16 at 10:25 am

#77 Smoking Man on 07.21.16 at 9:54 am

#73 BOOM! on 07.21.16 at 8:47 am
#46 Smokin Man

Do not try to explain differences between the sexes. You show you are totally clueless in that realm.
…………….

Damn your right, In the animal world there are distinct characteristics that define Males and Females.

Yes The Human Supremacist have evolved past those unique characteristics.

Clueless me. Yes I should follow PC doctrine going forward to avoid insults.

But then, I like Insults.
———–

The Ballad of Smoker Dude with his Ball and Chain

Well it’s been ten years, and a thousand tears
And look at the mess I’m in
A broken nose and a broken heart,
An empty bottle of gin
Well I sit and I pray
In my broken down Chevrolet
While I’m singin’ to myself
There’s got to be another way

Take away, take away
Take away this ball and chain
I’m lonely and I’m tired
And I can’t take any more pain
Take away, take away
Never to return again
Take away, take away
Take away this ball and chain

Well I’ve searched and I’ve searched
To find the perfect life-
A brand new car and a brand new suit
I even got me a little wife
But wherever I have gone
I was sure to find myself there
You can run all your life
But not go anywhere

Take away, take away
Take away this ball and chain
I’m lonely and I’m tired
And I can’t take any more pain
Take away, take away
Never to return again
Take away, take away
Take away this ball and chain

Well I’ll pass the bar on the way
To my dingy hotel room
I spent all my money
Been drinkin’ since a half past noon
I’ll wake there in the mornin’
Or maybe in the county jail
Times are hard getting harder
I’m born to lose and destined to fail

#86 Julie K. on 07.21.16 at 11:05 am

Are we debating the differences between men and women?

Short argument IMHO.

Suffice to say, when you critically observe the outcomes of male leadership across the globe over the last millennia, one might suggest a step-change is necessary.

Time for women to lead the world!

Male “leadership” is so old school…

#FSP

#87 AB Boxster on 07.21.16 at 11:05 am

FSBOs self-sell in order to save paying commission. Do they pass any of that saving on to the buyer? Nope. Greedy. — Garth

———————————————–
FSBO is not the problem.
The RE cartel is the problem.
FSBO is a logical reaction to the problem.

The reason FSBO’s exist is because the Real Estate cartel will not allow sellers (until recently) a reasonable alternative to a ridiculously high priced monopoly.

Don’t want to pay the full cost of a realtor?
Don’t want to sign the BRA?
Too bad, because the cartel will not deal with you.
Alternative is FSBO.

Recently, discount realtors are becoming available, but many buyer’s real estate reps will not bring their buyers, as they realize the discount model may reduce their absurd fees. An example of the ‘high level of professionalism and integrity’ in the business.

And ultimately, since when is it ever the seller’s responsibility to give the best price to the buyer?
Home prices are so divorced from the true cost of actually building a home that a ‘fair’ price does not exist.

Today the price of a home is whatever the fool buying it is willing to pay for it. (or to be more accurate, whatever monthly payments they think they can carry)

This blog has defended the practice of ‘assignment’ which is used by many realtors, where the buyer and seller agrees to a price (that is supposedly deemed fair) and where the house is assigned or flipped 3 times in the next 6 months at massive profits to the realtor)

How is that practice ‘fair’ to the original seller.
Because the buyer and seller both agree to a price?

Even if the real estate agent (supposedly acting for the seller) knows that they have another client in hand that is willing to pay far more for the property?

So it’s ok if the seller gets screwed by the realtor he has engaged, trusted and compensated, but unfair when the buyer’s agent does not get them the best price?
Somehow, that’s the fault of the FSBO seller?

The buyer, if they wish to have some help buying a home and negotiating price, should engage a realtor.
And since the buyer is getting the advice and the service then they should pay for the service.
The seller should have the same option.

Real estate fee models differ throughout the world.
The variation in these models is striking with either the seller or buyer or both paying the fees.
(in Germany it is more often the buyer that pays the fees)

But what is striking is that most fees are far lower, and make more sense, ranging from 2-6%.

Does it make sense to pay 6% on the sale of a highly liquid property that sells in 3 days in a hot market?
Well in Canada, it does not matter because the monopoly says you have to deal with them on their terms.

Break the monopoly.
Provide buyers and sellers with full access to complete information on the sales history of the home.
Allow buyers and sellers the option to engage RE agents or not.
Ensure that RE fees are fully negotiable, free of monopolistic pricing.

Then maybe FSBO will go away.

#88 Shawn on 07.21.16 at 11:12 am

But Greed is a FIVE letter word

FSBOs self-sell in order to save paying commission. Do they pass any of that saving on to the buyer? Nope. Greedy. — Garth

*****************************************
This response has been made repeated over the years by our esteemed host.

So it has consistency going for it.

But it implies greed is bad. Why so? Greed and the struggle for more and better is what makes the economy go round.

Adam Smith counselled that we actually contribute best to the economy when we look after our own interest. He said be wary of those who claim to trade for the public good rather their own good.

FSBOs may be good or bad in a particular case. But to suggest that they are bad because they exhibit greed is just strange.

This is not the occupy Wall Street blog.

Our host has made far better arguments against FOBO than this little sound bite.

For example, FOSO tend to over-price. (Which is bad not because of greed – which is an almost universal human trait – but because it won’t sell.)

#89 Ace Goodheart on 07.21.16 at 11:19 am

RE: “The real estate lawyer is actually much cheaper than the realtor.” Really? A buyer-agent costs you nothing. Not so much with a lawyer, who is not needed to draft an offer. — Garth

Don’t entirely agree with this. The buyer agent usually takes 2.5% of the commission. Whether you like it or not, this is your money because it comes out of the total price you pay for the home.

If people think sellers are not pricing homes to take into account 5% commission, then I have to tell you that they are.

In situations where buyer agents are purchasing homes which are listed on one of the discount brokerages or on a “list it yourself” service, what usually happens is the purchaser using this agent, will agree to pay the agent the 2.5% commission that they would have received, if the home had been listed by a full service agent.

Honestly, after purchasing and selling a number of houses, I would not recommend signing an agreement of purchase and sale without having a real estate lawyer look at it. That is just me. I am aware it is not required.

#90 Penny Henny on 07.21.16 at 11:24 am

#75 Penny Henny on 07.21.16 at 9:21 am
Garth says that FSBO are greedy people and that Realtors have an ability to “‘shop’ an offer when one arrives to try and drum up competitive bids”.
It seems to me that in both instances the seller benefits from getting the best deal for THEM.
Does this make someone greedy?
Are you greedy if you try to sell your car privately?
Is calling someone greedy a attempt to shame them for keeping more of their money in their pocket?

I think not.

FSBOs self-sell in order to save paying commission. Do they pass any of that saving on to the buyer? Nope. Greedy. — Garth

————————————————————-

FSBO has two offers on the table.
offer 1- $800,000 but the buyer is working with an agent whose is looking for 2.5% or $20,000.
offer 2-$790,000 with no agents involved, so no commission to be paid.

I know which offer I would take.
So am I greedy or just smart?
BTW, this is a real scenario.

Take #1 and the buyer can pay his own agent, wile providing both parties more structure, custodial services and compliance. — Garth

#91 Noel on 07.21.16 at 11:31 am

I didn’t use a Realtor when I bought my house, just a good lawyer and a good mortgage broker.

I knew the ‘hood I wanted to live in, I knew the approximate sales prices of the surrounding homes by asking around, going to open houses etc.

A Realtor would have provided exactly zero value for me personally. I think anyone with a reasonable amount of intelligence and time can navigate buying or selling a home without a Realtor no problem.

Funny thing is Garth has accused me of being a Realtor several times!

#92 Willdaman on 07.21.16 at 12:19 pm

#53 Keith in Calgary on 07.20.16 at 11:31 pm
“Realtots” are human trash.

Plain and simple. They serve no purpose and bring no value to the table, and they know it. This is why their respective RE boards fight the competition bureau.

They are one of the most disgusting forms of humanity to walk the earth. Pond scum.

When I sold Mercedes-Benz for 8 years they would occasionally would come into the showroom and once I found out what they did I’d just drop them like a rock. Literally, leave them standing in the middle of the showroom, while I walked away and did something worthwhile.
—————————————
A car salesman slagging on realtors? This is too funny.
Out of all the occupations out there that don’t really require anything more than a heartbeat, I’m not sure who the general public hates more, realtors or car salesmen. I understand the hate-on though, car sales seems like a tougher gig to make big money, vs realtors working in a hot market.

#93 };-) aka Devil's Advocate on 07.21.16 at 12:40 pm

#31 crowdedelevatorfartz on 07.20.16 at 8:32 pm
Alas Devil’s Advocate will bore us (boar us?) with his admonitions that “if only we stupid, uniformed, plebes understood what a Real Estate professional actually does for our benefit……”
We wouldnt talk such blasphemous foolishness.
Ironic coming from a Lawyer for the Devil.

Actually I was going to abstain this round, but you effectively conjured me up “Beetlejuice, Beetlejuice, Beetlejuice” } };-)
Use one (<cite a REALTOR®)or don’t. The choice is yours.
I am a REALTOR® and if I were to put my home on the market I, like 95% of the population for a variety of good reasons, would employ the services of a good real estate agent.
If there was no benefit to using a real estate agent there would not be a market for their services. Maybe in time, like so many other vocations (maybe even your own?), real estate agents will become extinct. I don’t believe that will happen over the remaining course of my career – if ever. But I could be wrong. A buddy of mine thought there wasn’t a snowball’s chance in Hell Trump would get as far as he has toward becoming the next president of the United States.
On a B.R.A. ( Buyer Representation Agreement); sign one or don’t, the choice is yours. I use a B.R.A. more as a prospect client qualifying tool. If they won’t sign the agreement I politely disengage as it has been my experience that those who won’t are not likely to be the kind of person I want to work with.
On F.S.B.O.s (For Sale By Owner); I will gladly introduce my buyer clients to them if it is a home that meets their wants and needs. I am, remember, under contract (BRA) with my buyer clients and duty bound to find the best property for them MLS, FSBO or just walking by and knock on the door. That is the level of service they can count on by making a commitment to me which I in turn make to them. Sometimes we do a FSBO deal. More often we do not as FSBOs, as my buyer clients soon find out, tend to be of much the same mindset as those who won’t sign an B.R.A. – competitive instead of collaborative.
It all comes down to collaboration. When you collaborate you amplify the outcome. When you are more concerned about competing for what’s in it for you, you end up expending so many resources in competition there can be no net gain. In a competition someone, if not both parties, lose(s). Only through collaboration is it possible for both parties to come out winners.
On not signing a PDS (Property Disclosure Statement); The question all others will ask is, “What are you trying to hide?”. Again Like a BRA and PDS is potentially another prospective client qualification tool.

Do what works for you as my clients and I do what works for us.

#51 Unumizer on 07.20.16 at 11:22 pm
Garth, how do we stop this. I was interested in looking at a new home. I contacted the listing realtor and he refused to show me the home unless I would sign the agreement. He would already get the listing commission but wanted both. I think that was highly unethical.

Was the “agreement” a BRA or was it merely the “Working with a REALTOR®” brochure REALTORS® are required to have you sign acknowledging you had a discussion on the forms of agency or lack thereof, wherein you could consent to a “Customer” relationship rather than a “Client” relationship?

“The real estate lawyer is actually much cheaper than the realtor.” Really? A buyer-agent costs you nothing. Not so much with a lawyer, who is not needed to draft an offer. — Garth

It is not true that a buyer agent costs you nothing. The remuneration the Buyer’s agent earns simply flows from and is incorporated into the proceeds of the sale.
This, in great part, is why I use a BRA.
1. It forces the conversation of what and how I get paid
2. It is a mutual commitment – what I will be doing and what and how I get paid for doing it.
3. It empowers me to approach any property owner (FSBO, MLS or otherwise) in my pursuit of that perfect property for my buyer client knowing I will be adequately compensated, as agreed, when successful.
4. It sets my remuneration. If a seller is offering more than the BRA states that excess becomes the property of my buyer client. If the seller is offering less my client agrees it will be topped up one way or another.
So you see the real beauty of a BRA is it promotes full disclosure and understanding forcing agents to have those conversations about their expected remuneration they might otherwise be uncomfortable having. This is why there are discount brokerages – some agents know they are not worth what the market is otherwise generally prepared to pay for such services so they discount their fees and try to avoid the topic whenever possible. That is how the myth that buyers agents don’t cost you anything is perpetuated.

#94 James on 07.21.16 at 12:49 pm

#77 Smoking Man on 07.21.16 at 9:54 am

#73 BOOM! on 07.21.16 at 8:47 am
#46 Smokin Man

Do not try to explain differences between the sexes. You show you are totally clueless in that realm.
…………….

Damn your right, In the animal world there are distinct characteristics that define Males and Females.
Yes The Human Supremacist have evolved past those unique characteristics.
Clueless me. Yes I should follow PC doctrine going forward to avoid insults.
But then, I like Insults.
…………………………………………………………………..
You don’t like insults. Your here for self gratification of your yourself. Sometimes adults seek attention because of jealousy. When someone finds himself threatened by another person who takes all the attention he is supposed to get he may respond with attention seeking behavior.
Lack of self worth can be another cause for attention seeking behavior. Some people think that they are overlooked and so they think that the only solution to restore their balance is to bring back the lost attention. The attention they will get in this case will provide them with reassurance and will help them think that they are worthy. Arrogant & overconfident people may seek attention because they have the feeling that they deserve to be in the center of attention. Because they aren’t mature enough they still think with their inner child’s mentality which makes them believe that they are the center of the world. Usually the child thinks that he is the center of the universe around which all other objects revolve. If the child’s way of thinking didn’t mature he will grow up thinking that he is the center of the world and so he will be an attention seeking adult.
Narcissists are also attention seekers. They consider this attention a good source of narcissistic supply and so they strive to get it. If you ignored a narcissist he will definitely hate you especially if he was hoping to get some attention from you.
So now take you toys out of the sand box and go home.

#95 Brett in Calgary on 07.21.16 at 1:23 pm

I have a new personal policy for the comments section. Any comment over a paragraph I don’t read. It seems comment length has an inverse relationship with quality.

#96 BOOM! on 07.21.16 at 1:52 pm

#77 Smoking Man

Everybody (most of us anyway) like a good insult, a roast, a jovial chide every once in a while.

Usually your posts are entertaining, informative, or instructive.

Not the last one (#46).

Everyone is entitled to blow it out of their keister every so often. Guess it was just your turn. Fan #17.

#97 Darryl on 07.21.16 at 1:56 pm

Thanks for the info on the SPIS Garth .

#98 Victor V on 07.21.16 at 2:18 pm

#84 Julie K. on 07.21.16 at 11:05 am
Are we debating the differences between men and women?

Short argument IMHO.

Suffice to say, when you critically observe the outcomes of male leadership across the globe over the last millennia, one might suggest a step-change is necessary.

Time for women to lead the world!

Male “leadership” is so old school…

=======================

Is the head of the US Fed male or female?
Is the leader of the IMF male or female?
Is the Chancellor of Germany male or female?
Is the front runner for the US Presidency male or female?
Is the President of Brazil male or female?
Is the President of South Korea male or female?
Is the President of Taiwan male or female?
Is the President of Chile male or female?
Are the CEOs of General Motors, YouTube, IBM, Pepsi and Hewlett Packard male or female?

#99 Bobby on 07.21.16 at 2:33 pm

Sadly, Devil’s Advocate is trying to defend the indefensible. Cases abound of buyers being forced to pay commissions after they have dumped their agents, more often than not for poor performance. There was just a very recent high profile case in Toronto. The judges take on it, buyer beware.
I recently purchased a home and when the realtor suggested a BRA, I said that if he provides the requisite level of service, I will continue to use his services. If he didn’t, then I would take my business elsewhere.
I agree with Garth, if a realtor insists on a BRA I would walk away. A BRA is there solely to protect the realtor, the weak ones.

#100 Chris in Nanaimo on 07.21.16 at 2:42 pm

We tried FSBO when we selling 3 years ago. Zero interest even though we were on MLS. I subsequently heard unofficially from 3 separate sources including a local trainee Real Estate agent that any FSBO listings are boycotted by local agents, they refuse to show them

And you were surprised? — Garth

#101 steelman on 07.21.16 at 2:52 pm

Real estate sales persons are parasites …. you are defending real estate people because you are best buddies with them.

Juvenile response. What’s your professional, angel? — Garth

#102 TurnerNation on 07.21.16 at 3:23 pm

USD/CAD going apesht again. I told you gold nuts Got USD?

The top work business -oil, drugs, weapons , human trafficking trades all use USD. That’s how our world works.

#103 Russ on 07.21.16 at 3:33 pm

You forgot Prime Minister of Canada in your list, below

==========================
Victor V on 07.21.16 at 2:18 pm

Time for women to lead the world!

Male “leadership” is so old school…

=======================

Is the head of the US Fed male or female?
Is the leader of the IMF male or female?
Is the Chancellor of Germany male or female?
Is the front runner for the US Presidency male or female?
Is the President of Brazil male or female?
Is the President of South Korea male or female?
Is the President of Taiwan male or female?
Is the President of Chile male or female?
Are the CEOs of General Motors, YouTube, IBM, Pepsi and Hewlett Packard male or female?

#104 Nothing To See on 07.21.16 at 3:34 pm

Chinese Bank tries to seize real estate assets in Vancouver…

http://www.theglobeandmail.com/real-estate/the-market/chinas-citic-bank-tries-to-seize-real-estate-assets-in-canada/article30637786/

Nothing to look at here folks. Move along. No validity to money laundering concerns raised for years.

I guess all that new found coverage of foreign capital in Canada is giving China the excuse to be more bold in its effort to stem the flow of capital and ramp up their efforts to seize the hundreds of billions that fled the country.

#105 Renter's Revenge! on 07.21.16 at 3:34 pm

#96 Victor V on 07.21.16 at 2:18 pm
#84 Julie K. on 07.21.16 at 11:05 am
Are we debating the differences between men and women?

Short argument IMHO.

Suffice to say, when you critically observe the outcomes of male leadership across the globe over the last millennia, one might suggest a step-change is necessary.

Time for women to lead the world!

Male “leadership” is so old school…

=======================

Is the head of the US Fed male or female?
Is the leader of the IMF male or female?
Is the Chancellor of Germany male or female?
Is the front runner for the US Presidency male or female?
Is the President of Brazil male or female?
Is the President of South Korea male or female?
Is the President of Taiwan male or female?
Is the President of Chile male or female?
Are the CEOs of General Motors, YouTube, IBM, Pepsi and Hewlett Packard male or female?

==================================

Britain had Queen Victoria for most of the 19th century. Just sayin’

#106 Alex on 07.21.16 at 4:02 pm

Some seasoned agents do provide value and experience but with low barriers in a hot market to entry any monkey can get in. With this market in Toronto and Van anything sells so the value the agent provides is overstated but in other markets, they may provide more value. I also do suspect some realtors may be at the poverty line based on how many realtors there are and listings are not increasing. Who knows? Any data on broke agents or are they all doing well?

#107 robert james on 07.21.16 at 4:23 pm

#102 I think those Chinese banks are being racist buggers !!!

#108 Ronaldo on 07.21.16 at 4:31 pm

#100 TurnerNation on 07.21.16 at 3:23 pm

”USD/CAD going apesht again. I told you gold nuts Got USD?”
————————————————————
Perfect. CAD down and PM’s up. Gotta like it.

#109 davikk on 07.21.16 at 4:54 pm

Commercial real estate in Calgary, the epicenter of the Canadian oil bust with 1.2 million people, is collapsing at a breath-taking rate.

http://investmentwatchblog.com/commercial-real-estate-in-calgary-the-epicenter-of-the-canadian-oil-bust-with-1-2-million-people-is-collapsing-at-a-breath-taking-rate/

#110 Nelley on 07.21.16 at 4:59 pm

#102Nothing-China is a communist oligarchy-the richest Chinese are those most connected to the government-which makes seizing billions part sideshow for the poor masses.

#111 Nelley on 07.21.16 at 5:09 pm

Wild stat-for the first time in 130 years, more Americans 18-34 are living in their parents house than with a spouse or partner http://www.marketwatch.com/story/for-the-first-time-in-130-years-more-young-americans-live-with-their-parents-2016-05-24

#112 Jim on 07.21.16 at 5:18 pm

Please let me know if I am wrong, but I was told when buying my FSBO house only Lawyers can log into the Ont. Prov. website to do actual property conveyance, and price is ~$1200 or up depending on % of sale price.

And as I purchased a pre-1890’s home, I used a Lawyer experienced with historic issues in my area.

#113 Smoking Man on 07.21.16 at 5:56 pm

#92 James on 07.21.16 at 12:49 pm
#77 Smoking Man on 07.21.16 at 9:54 am

#73 BOOM! on 07.21.16 at 8:47 am
#46 Smokin Man

Do not try to explain differences between the sexes. You show you are totally clueless in that realm.
…………….

Damn your right, In the animal world there are distinct characteristics that define Males and Females.
Yes The Human Supremacist have evolved past those unique characteristics.
Clueless me. Yes I should follow PC doctrine going forward to avoid insults.
But then, I like Insults.
…………………………………………………………………..
You don’t like insults. Your here for self gratification of your yourself. Sometimes adults seek attention because of jealousy. When someone finds himself threatened by another person who takes all the attention he is supposed to get he may respond with attention seeking behavior.
Lack of self worth can be another cause for attention seeking behavior. Some people think that they are overlooked and so they think that the only solution to restore their balance is to bring back the lost attention. The attention they will get in this case will provide them with reassurance and will help them think that they are worthy. Arrogant & overconfident people may seek attention because they have the feeling that they deserve to be in the center of attention. Because they aren’t mature enough they still think with their inner child’s mentality which makes them believe that they are the center of the world. Usually the child thinks that he is the center of the universe around which all other objects revolve. If the child’s way of thinking didn’t mature he will grow up thinking that he is the center of the world and so he will be an attention seeking adult.
Narcissists are also attention seekers. They consider this attention a good source of narcissistic supply and so they strive to get it. If you ignored a narcissist he will definitely hate you especially if he was hoping to get some attention from you.
So now take you toys out of the sand box and go home.
…….

That’s one hell of a rant. What’s your theory on why Ghost Busters flopped. Try and reason it out with using Sexist and Misogyny.

#114 CJBob on 07.21.16 at 5:57 pm

#107 davikk on 07.21.16 at 4:54 pm
Commercial real estate in Calgary, the epicenter of the Canadian oil bust with 1.2 million people, is collapsing at a breath-taking rate.
_______________________________
I’ve stayed away from REIT’s because this was inevitable, I don’t think it’s had an impact on the returns yet, though? Either way I sleep better at night with them.

#115 };-) aka Devil's Advocate on 07.21.16 at 6:29 pm

#97 Bobby on 07.21.16 at 2:33 pm
Sadly, Devil’s Advocate is trying to defend the indefensible. Cases abound of buyers being forced to pay commissions after they have dumped their agents, more often than not for poor performance. There was just a very recent high profile case in Toronto. The judges take on it, buyer beware.
I recently purchased a home and when the realtor suggested a BRA, I said that if he provides the requisite level of service, I will continue to use his services. If he didn’t, then I would take my business elsewhere.
I agree with Garth, if a realtor insists on a BRA I would walk away. A BRA is there solely to protect the realtor, the weak ones.

I disagree. You have to be a pretty strong REALTOR® to be able to present that document to a prospect buyer client, explain how you work and are remunerated and have few decline to sign. Of course it is a natural aversion for people to avoid making a contractual commitment. That is why you have to be strong and trustworthy at the core of it. If you weren’t people would see through it and walk away.

A lot of this business is selling yourself. If you can’t impart that level of trust and faith in your business strength you’re not going to make that all important first sale – getting the listing or BRA signed, and committed worthy clients are where it’s at Baby. I have better things to do than taxi some “looky loo” around. Better things like; looking after my real client’s needs.

#116 Spiltbongwater on 07.21.16 at 6:40 pm

Garth, would you in anyway be deterred to buy a property where the seller would not fill out the property disclosure statement? Would you not insist as a buyer it be done?

#117 Bobby on 07.21.16 at 11:53 pm

DA, I guess we will agree to disagree. I have used a few good realtors and in turn don’t hesitate to recommend their services. Their repeat business is based on the trust and commitment that they will provide an exemplary level of service. They rely on these and similar referrals to grow their business over time. I have seen too many poor realtors lead unsuspecting buyers down the wrong path to ruin.
Again, if you have to rely on a contract to retain your customers then I would suggest your level of service is suspect. Or worse yet, you are only able to solicit the lesser clients.

#118 Doug in London on 07.22.16 at 5:58 pm

The above comment is meant for the July 21 post comments section. Reposted.

#119 steelman on 07.23.16 at 9:04 am

?????????? I know you!