Real Estate

Earn back buyer's real estate agent commission - Become an Agent. New Humber College Course is now live!

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Member
Apr 11, 2011
219 posts
135 upvotes
Montreal
eonibm wrote:
Jun 9th, 2015 8:35 pm
This has been discussed in this thread. That may work if it is a sole offer situation which is hardly the case these days and even then it is not guaranteed. Almost everything has multiple bids and the highest offer wins not the one that has a reduced price due to no agent. Being a licensed agent on your own buy is the only sure way to get the buyer's commission.
Indeed, I agree that being a licensed agent is probably better to get the buyer's commission but well the bargaining way is not too bad either ;-)
[OP]
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Aug 2, 2010
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JohnMarston wrote:
Jun 9th, 2015 8:43 pm
Indeed, I agree that being a licensed agent is probably better to get the buyer's commission but well the bargaining way is not too bad either ;-)
Bargaining is always good, I just don't know if I trust the seller's agent to inform the seller in this frenzied market with multiple bids going back and forth that one buyer does not have an agent and therefore his offer is lower by the amount of the buyer's commission to account for that and so might be really higher than the rest when that amount is deducted. (Phew!).

And then when the multiple offers go back and forth each time that special situation with that offer will have to be remembered and accounted for to see if it is still effectively higher than the rest even though it looks lower!

That's a lot of reliance on the seller's agent remembering. Also the seller's agent could be in a conflict of interest if he is representing one of the buyer's that he is representing too (ie a potential double end commission deal as seller and buyer's agents) and so it would be in his best economic interest (but unethical and subject censure by RECO) for him to make sure the buyer with no agent loses the deal. Furthermore, he might not even be personally in a conflict but may favour another offer because it is being represented by an agent who is a friend of his and he does not want that agent to lose his commission.

So, very tough in a multiple bid situation. Easy to do if you are the only offer but then you really also have to know you are the only offer and make sure the seller (and not only the seller's agent) actually knows that you are not being represented by anyone.
Member
Apr 11, 2011
219 posts
135 upvotes
Montreal
eonibm wrote:
Jun 9th, 2015 8:56 pm
Bargaining is always good, I just don't know if I trust the seller's agent to inform the seller in this frenzied market
Looking from Quebec, the market seems pretty crazy in the Rest of Canada :P
Here, after years of growth, the number of properties for sale is growing and the price stagnates
The only things keeping prices from falling is the low number of lots for sale, the interest rate and people who do not want to lose money so they simply wait longer to sell ...
[OP]
Deal Guru
Aug 2, 2010
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JohnMarston wrote:
Jun 9th, 2015 9:10 pm
Looking from Quebec, the market seems pretty crazy in the Rest of Canada :P
Here, after years of growth, the number of properties for sale is growing and the price stagnates
The only things keeping prices from falling is the low number of lots for sale, the interest rate and people who do not want to lose money so they simply wait longer to sell ...
Higher demand due to desirability of location and lifestyle, immigration, low mortgage rates, lack of listings and dearth of land to build houses or even infil houses on is the problem in Toronto. Quebec doesn't have all of those factors.
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Apr 20, 2011
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Vancouver
I was looking around for a few companies that provide access to the Greater Toronto Area MLS but do not require being licensed as a Realtor.

Here are two. They provide much more detailed Toronto MLS data than what is usually available to the general public. They never require a fee. They require a bit of personal information such as your name, email address, telephone number, etc. So in other words, even as a member of the general public, you can get more of that Realtor info without directly bugging a realtor until you are seriously ready to make a purchase.

Some of the interesting things they provide is sales data, comparable properties, market information, automatic alerts when the computer can find a property you like, things like that, instead of just the normal feature sheets(price, size, description) on realtor.ca.

http://buymyproperty.ca/toronto-mls-sea ... istration/
http://www.janecotterillhomes.com/TREB- ... tings.html

People licensed for real estate in Ontario but not members of the Toronto Real Estate Board will not be able to pull this information for you without asking for help from partners, other brokers, etc.
[OP]
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Aug 2, 2010
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When I finish my pre-registration in 4 months (if I can get early enough exam dates) I am going to join TREB for the extra $1,335/yr for TREB/OREA/CREA membership (beyond the initial registration fees). It is not much, I can afford it and it is also deductible against income. That way I will have my own access at home or anywhere else in the world rather than having to rely on someone else that has membership to TREB for me.
Member
Dec 10, 2013
359 posts
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KITCHENER
lenkov wrote:
Jun 4th, 2015 12:26 am
Nice! But why do you need to become an agent to save on real estate fees on the buying side? There is no commission to pay.
You poor soul. Right there's no upfront fee for a buyer, what you pay is included into the price of the sale, thats why there's "no fee" for you to pay. but really you're paying just as much to the agents as the seller is.
Sr. Member
Aug 6, 2014
770 posts
210 upvotes
Ottawa, ON
interested to see how this all works out. thanks OP for being so up front about fees/time invested!
[OP]
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Aug 2, 2010
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How to keep your real estate license active for the least cost:

Sorry this is so long but to properly explain it all it takes some time. Skip it if you are planning to be a part of organized real estate by joining your local real estate board such as TREB (which means you have to join OREA/CREA too).

I can't put this in the first post as it has reached its maximum length. For those of you who want to get your licence but not join organized real estate (ie TREB/OREA/CREA) and not pay their fees, read on. You can do this after the pre-registration part when you get your initial licence or after you renew it after completing the entire course (having been a member of TREB/OREA/CREA during your articling segment, or not). This post also dispels more misinformation I have heard about not being part of organized real estate and took me quite a while to figure out with many calls to different brokerage agencies because of some of the misinformation posted even on some of their own websites (which at least one said they are now going to correct as a result of my phone call!).

RECO issues your licence, renews it and provides the E&O insurance. No one else. As long as you keep it active you can transact real estate in Ontario under the legislation (REBBA 2002). Organized real estate like OREA & CREA and local real estate boards like TREB have nothing to do with the licensing process but merely provide services like MLS. Some people who want to stop paying the extra fees for organized real estate but keep their license. They do what the industry calls 'parking' their license. This is not a term recognized by RECO but everyone uses it and it means that you are registering as an agent with a brokerage firm that is not a part of organized real estate. Most of these firms exist only for the purposes of allowing you to keep your licence, which will cost you about $600 annually (renewal fee with RECO every 2 years and then annual E&O insurance fee) and then $99 or more to the brokerage for the parking service. Most of these brokerages which allow you park (also called 'warehouse') your license do not allow you to transact real estate under the brokerage firm simply because they don't allow you to. They could but they are not set up for that. They are only set up simply for parking your license and yes this is totally legal under RECO rules. There are a lot of extra costs, supervision, etc that is required if the brokerage was to let you transact real estate under their banner and that's not their business plan. They only allow you to park your license. Some of them are just brokers working out of their home office with a website and nothing else. You can still make commissions though by referring clients to other agencies and these brokerages you park your license with allow you to and encourage it because they take a cut of the referral fee. When you refer a client to another brokerage (using a 'referral agreement') then that brokerage handles the entire deal. They just agree to pay you a cut of the commission, which is usually 25-50% (likely only the latter if it's a friend of yours or you send a lot of business their way). Then the brokerage where you parked your license takes a cut of the referral fee and gives you the rest. You actually do nothing except supply the client and then hope they close a deal.

Not every licensed agent joins TREB (or their local board)/OREA/CREA but most do as it is not mandatory to join them to transact real estate in Ontario under the legislation. RECO gives you your license and your E&O insurance, not those organizations. If you don't join organized real estate how does that limit you? I can think of 5 things, most of which can easily be done without being a member and which mostly relate to the sale of a property not the purchase, which is the subject of this thread. Probably the biggest is the fact you cannot access the private MLS® that real estate agents only have access to (using a User ID, password and authentication key provided by a key fob - for TREB it is http://www.torontomls.net/Login.asp)

1) You must use a 'referral agreement' to list a home. This is an agreement with the brokerage that you refer your client to (who is either buying or selling) and it states the % of the commission they make that they will give back to you for referring the client. They do all the work. This adds a step and usually results in you not getting 100% of the commission but rather 25-50% (but there are brokerages that do facilitate 100% referral commission by having 2 offices, one non-TREB and one TREB affiliated and allowing you to refer a client to their other office, ie of the same brokerage firm you are registered with, and get all the commission - you do all the work in this case);
2) You cannot view the % commission paid to the buyer's agent online but you can just call the listing brokerage to find out. However, the buyer's agent commission should not sway you if you are ethical as you should be representing the best interests of your client not your own in trying to make sure you get a good commission. ;
3) You cannot run comparable sales reports,, but those are obtainable free from any agent that is a member;
4) You cannot put the MLS® and Realtor® logo/trademarks on your business card, lawn sign and marketing material. Why? Because CREA own has exclusive ownership and a proprietary interest, respectively, in those trademarks.
5) You cannot sit at home or at the brokerage office (or anywhere else in the world you have internet access) and browse the private MLS® and view the extra information provided there (noted above) alone but nothing stops you from sitting beside an agent who has the access and looking at the information posted there for listings with them. Also, the public MLS® (www.realtor.ca) scrapes the same information from the private MLS® daily anyway (except for the commission rate) and you can run searches for properties there.

If anyone knows any other things you can do let me know and I will add them.

So, how much could you make by just referring clients who close a deal and not doing anything else? On the typical 2.5% cut of one side of a real estate deal on the typical $1.15M house in Toronto, say you get 25% of the commission generated by the brokerage you referred the client to (ie a deal does have to close). Your brokerage firm would take anywhere from 10-50% of that depending on what type of monthly fee you pay them to park your license with them. Say their cut is of the referral commission is 10%. So, your commission would be 2.5% x 25% x 90% x $1.15M = $6,470 for doing nothing except referring the client. Now of course your client has to agree to be referred and you convince them by telling them you are referring them to an agent that is going to do a great job (but make sure they will or you are not doing your friends a favour). Also, you are required under the ethics rules to disclose to the client that you are receiving a referral fee (but I am not sure yet if you have to tell them the % of the referral fee you are getting). If you refer a lot of business to a particular agent at another brokerage your cut could be as high as 50% so you could make $12,940 on th example I just gave.

There are some brokerage firms that you can park your licence with that have more than one office with some being TREB/OREA/CREA members and some not. So you park your licence with the one that is not to avoid the extra fees but refer to the one that is. You get could get 100% of the commission back if that is the way that brokerage firm with more than one office has set up their referral policy as you are just referring the deal from one of their offices to another one of their offices. In this case you do the work though. You typically pay a cut only on your first deal, of about 10%, then a $200 flat rate per deal thereafter (on top of the $99+ fee you pay the brokerage per year). The things you cannot do (like directly access MLS, etc) are listed in my first post near the end. But there are ways around it as you can see there. This arrangement is the best of both worlds if you want to keep your annual mandatory costs low but transact deals yourself. I am going to join TREB/OREA/CREA because I want direct access to MLS from my home or anywhere in the world and also to put the MLS and Realtor logos on my marketing material and business card.

It's important to know these things because once you get your licence you should keep it active or else you may have to do the course all over again to get licensed again. This will happen if you do not renew within 2 years after your last renewal lapsed. You could pay as little as $700 ($600 + $99 parking fee) to keep your license active per year with no obligation whatsoever except to pay $44 and do 24 hours of continuing education every 2 years (1 hr/month). You could also write this off against your income, but I would say if you keep doing it year after year without ever showing any income from real estate transactions the CRA could start denying the deduction.

Btw, you may come across brokerage firms that will park you licence and some will say on their website that you cannot do this and you cannot do that and some even refer to the RECO website making you think that RECO has this restriction. RECO absolutely does not. What they are actually saying is they, ie the brokerage firm, won't allow you to do it, not RECO. This is because they are not set up in a way to provide the oversight of agents that RECO requires of brokers, so they only allow you to refer clients to other brokerages. These brokerages are typically just websites with the broker working out of their home. There is nothing illegitimate about this and they must operate according to RECO rules. RECO likely allows this because it generates a ton of fees from all the agents who park their licence with such brokerage firms and RECO does not have any activity requirements in terms of transactions agents must do per year either. As long as you pay your RECO fees and do the required 24 hours of continuing education every 2 years you get to keep your licence. These brokerages are not a part of organized real estate because most agents who park their licence don't want to be in order that they can reduce their annual fees. If the brokerage where you park your licence is a part of organized real estate then you as an agent would have to pay the organized real estate fees too because you are registered with them. Hence why some brokerages have 1 office that is a part of organized real estate and one that is not, as explained above. However, most don't do this because they want to be either full-service brokerage firms or not but not both.
[OP]
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Aug 2, 2010
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Here 'n There
With all the interest from people on here in doing the course, I just want to reiterate that if you can find an agent that will give you cash back (some say almost all do in Ontario, I say there are in the miniority but let's not argue about that) and if the buyer's commission was 2.5% and you did get 1% cash back then you gain 2.5% - 1% = 1.5% if you are licenced. On, say, a $500K condo that is $7,500 less the $3K+ you need to just get initial registration. That's $4.5K of which you'd have to give 10% to most brokerages = $4K which is taxable. At 40% tax rate that's $2,400 to you. That is hardly worth it for 175 hours of study and passing 3 exams. At the average $1.15M single-detached home price it works out to $12.5K taxable so $7.5K after tax which still might not be worth it for some people as you also have to take full two weeks of classroom instruction or about twice that evenings.

So, you see, it really depends on the price of the property you intend to buy. I buy properties way above the $2M mark so it's really worth it for me, not to mention I have 2 listings I need to do. But, as I have said, don't do the course solely to do a sell side transaction as you can already do flat rate MLS listings.

My gut feel is that this is an intriguing and educational thread for many but hardly anyone will actually do the course as a result of reading it because it simply is not worth it for them.
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Mar 26, 2015
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BC
iblackford wrote:
Jun 6th, 2015 10:31 am
I really champion this kind of behavior, becoming licensed/certified in order to learn more/save money/control your own life.

I did something similar last year by getting my Termite exterminators license for Ontario. Could there be a forum dedicated to self-certification so that these topics can be discussed?
Great idea. Or get this post stickied at least..
[OP]
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Aug 2, 2010
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Here 'n There
So, I am wondering: How many RFDers have actually enrolled in the first course by paying their fees?
Deal Addict
Aug 25, 2005
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here and i plan on completing both courses now. buy my own home and then park my license is the plan (i'm assuming you've been referring to Net More)

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