The Toronto Star reports today "Get set for cheaper fees for Canadian real estate transactions."
The article details the recent agreement between the Canadian Competition Bureau and the Canadian Real Estate Association which will now allow real estate agents to provide "innovative services and pricing options to customers." Toronto Star Article
This is a landmark deal? Real estate agents have always been allowed to be innovative and offer a variety of pricing options. A listing agreement can be arranged based on 5, 6 or 7% commission. There is no price-fixing in commission fees, the rate is related to the value of the service. You can also charge 1% or NOTHING, if you like to work for free.
I noticed a listing on the Multiple Listing Service this week, which has been on the market for 89 days, before this landmark deal was reached. The commission offered to the Co-operating Broker (the one who brings the buyer) is $1. The remarks to Brokers is as follows :
The Seller Is Selling Privately And Will Negotiate Directly With Cooperating Broker Under Guidance Of His Lawyer. All Appointments And Offers Are To Be Arranged Directly With The Seller
So there you have it folks! Innovative pricing, $1 commission, and someone who is selling privately and is listed on the MLS. Congratulations!
But what does that accomplish? The listing has been reduced from $709,000 to $689,000 and has been sitting on the market for 83 days. Statistics indicate that properties that are handled by a skilled professional Realtor will be on the market for less than 30 days, and on average sell for 97% of list price.
One of my clients, was very eloquently able to communicate the value of a Realtor, in his letter of recommendation to me he wrote:
While the financial results you obtained were exceptional what impressed me most was the thorough and professional approach that you took throughout the process. You were industrious, practical, and honest in your treatment of both the prospective buyers and me.
Perhaps your greatest asset is your attention to, and skill at, communication. I was very inexperienced in the process of selling a house but such was the information you provided regularly that I came to feel comfortable and competent, and always in the loop.
My family chose you over agents that we knew and who offered a discount rate. You were worth every penny of your commission and proved once again that one usually gets what one pays for.
I rest my case.
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