Real Estate

Lower your Listing/Selling Fees - Use Flat Rate MLS

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Deal Addict
Jun 29, 2007
4528 posts
1235 upvotes
Thanks. I will check out those other sites. While I don't live in Toronto, I found such topics to be very interesting. Too bad these types of websites are not available for Vancouver. I have found Toronto to be a lot more competitive/efficient than Vancouver when it comes to selling/buying real estate.
eonibm wrote:
May 25th, 2014 5:28 pm
Yes, I get a Zoocasa email every day. It's interesting to see what properties in Toronto are selling at and after getting it for a year now I am getting an idea of what properties should be listed at. However, some of the prices are beyond belief (over $1M for a fixer upper/gut job on a 20ft lot with no parking close to downtown?) and often comparables even in the last year have no bearing on how much higher a property will sell for.

Another website I read every day is Guava. This website has an interactive map of Toronto that you can zoom in on and it shows the price of properties and any price drops. It is better than anything MLS produces.

Another one is The Mash. Again, Toronto-based. It is a real estate 'gossip' website that posts pictures and descriptions of homes when they are listed with some absolutely hilarious writing and people can post comments. When prices go down (sometimes they even go up) updates are provided. I love reading it.

Too bad they don't have Zoocasa, Guava & The Mash for every city.
[OP]
Deal Guru
Aug 2, 2010
14309 posts
4177 upvotes
Here 'n There
Captain_Ron5 wrote:
May 25th, 2014 5:35 pm
Same with choosing a buyer's agent. A lot of my clients will come to me along the lines of "We told our best friends that you gave us $5,000 cash back on our purchase but they have a friend from highschool and decided to use her to help them buy a home," and the friend is noting give a dollar in terms of cash back.
That reminds me of a lot of my friends who choose financial advisors because 'we met with him and he seems like a nice guy' and 'my friend uses him and says he's really good' but then when you ask what their annual and average returns against a benchmark are they don't have a clue. They don't even know if they are getting value or not but they 'think' they are.

The one thing I do hear from friends is that they do not feel that they can under a flat fee listing handle the offers that come in. I never thought it was such a difficult thing. It seems that the most important aspects to keep in mind are what is or is not included in the offer (ie make sure that chandelier that's affixed to the ceiling and been in the family for 100 years and that you don't want to sell with the home is specifically excluded from the offer) and conditions like home inspection, closing date and deposit amount. The last time I bought or sold a property was 10 years ago (I've sold a few) and that aspect of the sale process always seemed extremely routine and easy to understand to me.

Am I missing something that makes it all so complicated?
[OP]
Deal Guru
Aug 2, 2010
14309 posts
4177 upvotes
Here 'n There
Speedy1 wrote:
May 25th, 2014 5:37 pm
Thanks. I will check out those other sites. While I don't live in Toronto, I found such topics to be very interesting. Too bad these types of websites are not available for Vancouver. I have found Toronto to be a lot more competitive/efficient than Vancouver when it comes to selling/buying real estate.
Yet our real estate commissions in Toronto do not appear to have come down at all. I certainly don't know of anyone that I am as impressed with as I am with Captain_Ron5 here but I am certainly going to look around. I certainly would stay away from someone like 'licensed' who appear to just want to pull the wool over people's eyes.
Deal Addict
Jan 11, 2004
4886 posts
466 upvotes
Victoria
Captain_Ron5 wrote:
May 25th, 2014 2:28 pm
I am in the middle of building a custom 4,500 sq/ft house.
If you don't mind me asking, what do you think your cost per sq ft is going to be? Are you your own general on the build? Just curious because you're in Victoria too.
Not a political sig
Deal Addict
Jun 29, 2007
4528 posts
1235 upvotes
I think the selling agent plays a fairly significant role. Most of us here would do serious research before we buy/sell a house but a lot of people don't. There are a lot of new immigrants buying houses in Vancouver area who are mostly relying on the selling agent's advice. It is the wealthy Asian immigrants/investors who are clearly driving up prices. There is also a trickle down effect with other properties. I follow the real estate market in Vancouver area fairly closely. I don't have the exact dates and prices but here is an interesting example I have been following:

3 - 3.5 yrs ago, this house in my area was property assessed at about $1.25 million and it was bought fairly quickly (2-3 months after being listed) by new immigrants for about $1.8 million. I was shocked how much they paid. I figured the house was worth no more than about $1.3 to $1.4 million at the time. I thought their agent did them a huge disservice.

About 1.5 years later, guess what. They put the house up for sale at about $2.75 million. The house is listed by the agent who sold them the house and it has been on sale for at least 14 to 18 months now. It's reduced to about $2.7 million now.

The property tax assessed value now is $1.761 million. Houses in Vancouver are currently selling at about -ve 5% to +ve 15% of property tax assessed value. Good luck trying to find another sucker to overpay for that property.

If the owners are smart, they would have realized their agent got them to way overpay for their house and after 3 yrs, they would be lucky if they got what they paid for it after netting out selling costs.

And the funny thing is, their Remax agent is one of the top agents in Vancouver area.
eonibm wrote:
May 23rd, 2014 12:19 am
It's quite understandable actually. Let me educate you a bit:

He is pointing out that real estate agents don't make a market. The real estate market is governed by mortgage interest rates, supply and demand and the sentiment of those in the market to buy and to sell a home among some other less important factors. Higher interest rates will result in prices that do not climb as fast, stay stagnant and even decline. This has happened multiple times over the last 60 years in Toronto. Most people today pay no attention to interest rates and how they will be affected when they rise. They are more concerned about about the monthly expense they can afford. Interest rates need only increase about 2-2.5% for most people's mortgage payments to increase by about 50% upon renewal. If they can barely afford that now then they certainly will not be able to later as this could easily happen in the next 5-10 years. Will people's wages increase by that amount in the same time period? Hardly! What do you think that will do? Yup, prices will start falling.

Supply and demand is a factor, but no one can predict these. They are affected by many different factors including employment figures, interest rates, etc.

Market sentiment is another factor. If prices start to slide a bit and people feel they will more, then it is possible that people will start to wait until the price goes lower demand then falls, prices go lower and it feeds on itself and becomes a self-fulfilling prophecy.

Real estate agents have no effect on any of these factors.
[OP]
Deal Guru
Aug 2, 2010
14309 posts
4177 upvotes
Here 'n There
Speedy1 wrote:
May 25th, 2014 6:22 pm
I think the selling agent plays a fairly significant role. Most of us here would do serious research before we buy/sell a house but a lot of people don't. There are a lot of new immigrants buying houses in Vancouver area who are mostly relying on the selling agent's advice. It is the wealthy Asian immigrants/investors who are clearly driving up prices. There is also a trickle down effect with other properties. I follow the real estate market in Vancouver area fairly closely. I don't have the exact dates and prices but here is an interesting example I have been following:

3 - 3.5 yrs ago, this house in my area was property assessed at about $1.25 million and it was bought fairly quickly (2-3 months after being listed) by new immigrants for about $1.8 million. I was shocked how much they paid. I figured the house was worth no more than about $1.3 to $1.4 million at the time. I thought their agent did them a huge disservice.

About 1.5 years later, guess what. They put the house up for sale at about $2.75 million. The house is listed by the agent who sold them the house and it has been on sale for at least 14 to 18 months now. It's reduced to about $2.7 million now.

The property tax assessed value now is $1.761 million. Houses in Vancouver are currently selling at about -ve 5% to +ve 15% of property tax assessed value. Good luck trying to find another sucker to overpay for that property.

If the owners are smart, they would have realized their agent got them to way overpay for their house and after 3 yrs, they would be lucky if they got what they paid for it after netting out selling costs.

And the funny thing is, their Remax agent is one of the top agents in Vancouver area.
Aren't you mixing up buying and selling agents? It was the buyer's agent that got them to over pay as the buyers in your example were represented by a buyers' agent not the seller's agent. It's is only the buyer's agent that can urge a buyer to "bid more, bid more, sign it back and more, etc" (they don't use exactly those words of course, it's more subtle than that). The seller's agent merely receives the offers and talks with their client in order to prepare a sign back offer. Sure the seller, if they do talk to the buyer, say, at an open house or otherwise, might tell them the house is 'worth' bidding more for. But, gimme a break. Any buyer in any situation must realize that a commissioned salesman makes a commission, be it real estate that is being sold or anything else and naturally they are going to say it's worth more.

I remember one tactic one buyer's agent kept using on me as my offer went back and forth years ago on a house I ultimately bought. He kept saying "Now, how would you feel if you didn't bid $10K more and didn't get the house). I was not in a bidding war but the seller kept signing back the offer than my counter-over but lower then their previous counter-offer.

I doubt the sellers agent has much to do with encouraging a higher price other than advising that the offer be signed back at a higher price. Maybe Captain_Ron5 can pipe in here too.
Deal Addict
Jun 29, 2007
4528 posts
1235 upvotes
From what I can tell, real estate commissions in Toronto is more competitive than they are in Vancouver.

There is more competition. It's easier to find realtors who openly advertise lower commissions. There is 1 or 2 who post here.

You can find realtors in Vancouver area who will offer rebates (if you are buying), which is Zoocasa's model or charge lower commissions, but they are not as open about it as realtors in Toronto. 1 example is Zoocasa started out in Toronto.
eonibm wrote:
May 25th, 2014 5:46 pm
Yet our real estate commissions in Toronto do not appear to have come down at all. I certainly don't know of anyone that I am as impressed with as I am with Captain_Ron5 here but I am certainly going to look around. I certainly would stay away from someone like 'licensed' who appear to just want to pull the wool over people's eyes.
Jr. Member
User avatar
May 18, 2008
185 posts
68 upvotes
Victoria
dealguy2 wrote:
May 25th, 2014 6:02 pm
If you don't mind me asking, what do you think your cost per sq ft is going to be? Are you your own general on the build? Just curious because you're in Victoria too.
I am budgeting $500,000 but that includes my father helping a lot and he is a multi-talented immigrant guy (really good at rock work, tile work, hardiplank siding, landscaping, etc.) and that also includes all my business connections and the associated deals (one of my repeat real estate clients owns a granite/quartz company, etc). The combination of those two things probably brings my cost down $100,000 to $150,000. The average Joe that can't do anything on their own in terms of work would probably have to budget north of $600,000 for sure.
Marko Juras, REALTOR® & Associate Broker @ Fair Realty, Victoria, BC - "I believe in a competitive marketplace and real estate commissions should be no exception."
Deal Fanatic
Jul 3, 2011
5328 posts
2402 upvotes
Thornhill
When a Realtor lists a home for a seller, that seller deserves every chance possible to sell their home – my opinion, and it’s how I conduct business.

Realtor.ca is the first place most buyers will learn of a property for sale, yet Realtors who don’t do open houses automatically remove a 5% (in the GTA) chance of the buyer walking in that door. But they somehow expect that as one of hundreds of thousands of web sites, a buyer will magically see a listing on theirs first.

No open house means no private buyer walking in to see it and how many times have we seen on RFD members talk about using the open house to talk to the listing Realtor about cutting a deal because they don’t want to use a buyer agent? I‘ve yet to hold an open house without at least one buyer wanting to go this route.

Open Houses provide:
- an opportunity for people to walk in casually without their agents and decide if this is the house they want. If it is, they then book another showing.

- the opportunity for a good agent to market all aspects of the home, show them what a buyer's Realtor unfamiliar with the home may not see and sell them on the location.

- neighbours with the opportunity to tell their friends and family they’ve seen a home they might like.

- the opportunity to create buzz

And every once in a while it even causes someone who wasn’t even looking to fall in love with the property and buy it.

The odds of winning just $5 in Lotto 649 prize is 1 in 81.2 or 1.2%, yet millions buy tickets every week and I’m sure even Realtors who don’t believe in open houses. But for them to spend a few hours marketing the biggest asset most people have – well those odds just aren’t worth it.

There is no valid excuse for a full service Realtor to not spend a few hours and provide all opportunities possible. I surmise those who don’t just don’t want to spend the effort or feel their compensation doesn’t warrant the effort or don’t care and they won’t put much time into marketing it anyway, they’ll just leave it up to realtor.ca and buyer agents. And we’ve read about that complaint and agent laziness often enough on RFD.

If you don’t want to get as close to 100% marketing effectiveness, then make up excuses why open houses don’t work and don’t hold one. But do put a for sale sign up on your cul-de-sac because you know, everybody will see it.

If you hire a Realtor, don’t contribute to the laziness you would otherwise complain about – make them work!
Deal Addict
Jun 29, 2007
4528 posts
1235 upvotes
"Aren't you mixing up buying and selling agents?"

I took the courses and got top marks many years ago. I could have even opened my own real estate office. Never practiced as a realtor though.

Buying and selling agent terms can be confusing. Perhaps my terms are up to date. When I thought of selling agent I was thinking that it is really the buyer's agent who is selling the house, thus I used "selling agent". Listing agent does little once s/he gets the listing. It is by far the buyer's agent who has to do the work to convince the potential buyer to buy.

Yes, in my example it was the buyer's agent who initially gave terrible advice. That buyer's agent is now the listing agent = seller's agent.
Jr. Member
User avatar
May 18, 2008
185 posts
68 upvotes
Victoria
You have a home worth $500,000 and REALTOR® A charges 5.0% commission and does lots of open houses. You price the home at $509,000.

You have a home worth $500,000 and REALTOR® B charges 2.5% commission and does no open houses. You price the home at $497,500.

Which one do you think is going to sell faster in this day and age?

I stand by my comment that I will only do open houses if the seller asks me to if he or she really thinks it will help the sale. It won't, but it makes sellers feel better. In my full service listing contracts I do put into the addendum, "Up to three open houses (only if desired by seller)."
Marko Juras, REALTOR® & Associate Broker @ Fair Realty, Victoria, BC - "I believe in a competitive marketplace and real estate commissions should be no exception."
Deal Fanatic
Dec 5, 2009
5136 posts
2903 upvotes
Nobody charges 5%. That would mean a total of 7.5% w/ buying agent commission.
Jr. Member
User avatar
May 18, 2008
185 posts
68 upvotes
Victoria
fdl wrote:
May 25th, 2014 7:36 pm
Nobody charges 5%. That would mean a total of 7.5% w/ buying agent commission.
I was referring to 2.5% gross versus 5% gross. Remember, you can have a 2.5% gross commission (for example, if you split it 1% listing end, 1.5% cooperating commission).
Marko Juras, REALTOR® & Associate Broker @ Fair Realty, Victoria, BC - "I believe in a competitive marketplace and real estate commissions should be no exception."
Deal Fanatic
Jul 3, 2011
5328 posts
2402 upvotes
Thornhill
What does pricing a home have to do with open houses? The purpose of the open house is to attract as many buyers as possible, create buzz, market it to it’s highest extent etc., etc. Just because it is priced lower doesn’t mean you cannot seek out the best and highest price for it.

Maybe in Victoria where what 4,000 homes per year sell, it just might be that spending 2 hours of your time just isn’t worth it to commiserate with potential buyers and show how passionate you are about your client’s sell and talk up all of the pros of same. Maybe it’s just not worth it to try and attract the 80 people (2%) but sales rank close to 90,000 in the GTA and I stand by my opinion, that a client deserves as close to a 100% effort as possible.

I’ve sold them from open houses to buyers who were directed to get their own buyer agent at that.

RFD members consistently talk about walking into open houses because they won’t hire a Realtor. They can’t be both right and wrong about their effectiveness at the same time.

edited to add: and maybe, just maybe, the criticism that listing Realtors are lazy because all they do is fill out some paperwork and stick it on MLS, just might be lessened.
Jr. Member
User avatar
May 18, 2008
185 posts
68 upvotes
Victoria
Clients deserve the best possible value. Asking for 5% commission (please note commissions may vary) and justifying it as effort via open houses, which statistics over and over prove are not effective, is not delivering value to the consumer in my opinion.
Marko Juras, REALTOR® & Associate Broker @ Fair Realty, Victoria, BC - "I believe in a competitive marketplace and real estate commissions should be no exception."

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