Quote:
Originally Posted by sketchyt
That weight is steadily decreasing because they can no longer hide behind their wall of sold data. For example, CREB even sold their data to a for-profit entity which they set up with other boards as a way to be compliant competitively. They also cut themselves off at the knees as the top value prop for a realtor WAS access to data.
Consumers can now educate themselves with platforms where you don't have to speak with a realtor (in no way, shape or form am I affiliated with the below):
If good realtors are worth their weight in gold, then a halfway-decent real estate lawyer is worth their weight in antimatter. This is where I actually found value in the RE process. |
Just to play devil's advocate:
I think the biggest problem with realtors and their commissions is
a) the general lack of meaningful standards in the industry;
b) the lack of alignment between client interests and compensation, and;
c) the relative visibility of the commissions.
For a), the bar to become a realtor is abysmally low and the requirements to maintain licensing are - as far as I'm aware - virtually nonexistent, essentially coming down to whether or not you pay your pimp, er, real estate office. As noted, a realtor is supposed to be a trusted advisor in the most significant transaction many people make in their lives; the licensing process should reflect that.
On point b), I have a hard time accepting the idea that all buyers agents act in the best interest of their clients, when the commission is essentially paid by the seller and their agent (via split). We've all seen the stories of buyer's agents not showing FSBO or cut-rate commission listings to their buyers because there isn't the same commission in it for them. If instead each party paid an equitable commission (i.e. 3.5/1.5 in Calgary - which is generally low, btw), agent and client interests would be more closely aligned.
Lastly, point c) isn't so much about the industry as it is about perception; real estate commissions are generally in line with compensation relative to the size of the transaction, the only difference being that Joe-public doesn't necessarily realize what the (%) margins are for a interior designer, investment banker, boat dealer, etc... What essentially amounts to ~1.5% for a 500k, million or two million dollar transaction isn't out of line. I think the real problem is when that commission gets paid whether dealing with a top level professional or some loser schmuck that manages to trip over a deal.
Essentially, if the quality of the people involved more closely matched the level of the transaction, I think the entire process gets better and people would have less issue with the costs involved.