A bit of History
When we joined the Real Estate profession we knew that we were going to do it our way and that we might raise a few eyebrows or get some salespeople upset . However hardly could we imagine it would take the form and size it did within only a few months of active duty.
Late night calls from salespeople : "You won't be making friends like that." (Friends with whom? Other Realtors? at the cost of our clients?.. Not on your life buddy!!)
From Brokers:: "You will immediately stop this."
From RECO (Real Estate Council of Ontario): "You will have to abide by the rules."
Guess what we did wrong. ??.!!
We advertised on our website certain properties that we thought would fit in a certain category.
Making it easier for our clients to find what they were specifically looking for : waterfront properties, starterhomes, fixer-uppers, investment properties etc.) We had at least six dedicated websites for it.
Naming in full who the listing agent was and what brokerage.
However that is an absolute NO-NO.
Many people don't even realize or are asked about this little known clause with which the salesperson or brokerage can invoke exclusive advertising rights.
Let's be clear about this: Nobody has to give a brokerage exclusive advertising rights!! and you are stupid if you do!!
Why would you want to limit your exposure? Why hide your property in a wee 1 by 2 ad in the Real Estate Today?
Why would you want to limit the options you have to reach as wide a range of people to get your property sold as quickly as possible??
It does not cost you anything, it does not cost the brokerage anything. They still have the exclusive right to mediate in the sale of your property. Quite frankly,why what we did caused such an uproar is still beyond us. Except for one thing:
We learned very quickly that it is all about money.
It is never about your house, never about your property.
If the salesperson can sell your house without another salesperson acting for the buyer, the salesperson rakes in the whole commission of (usually ) 5%, of which the brokerage gets its percentage.
It is this dirty little secret that was threatened by our actions.
That this whole scheme is against one of the most basic and primary pledges of the Code of Ethics, did not seem to faze either the salespeople or the brokers or the Ontario Real Estate Association.
As one broker said to us: "I have the exclusive right to advertise this property."
Which means -as a rule- a $13 ad in the Real Estate Today , a sign on the lawn and a write up in the Multiple Listing System.
If we take the average days to market to be 60 to 90 days (industry average), the advertising costs would max out at $170.-. (13 x $13.-)
A house in the $200,000 plus range might get a bit bigger ad.
But for those efforts you are to pay in excess of $10,000.- !!!
Mind you, this money is not all going to the salesperson. He/she only gets anywhere from 50% to 80% of it depending on the deal he has with the brokerage. From this a further amount goes towards administration, membership dues, insurance etc.
The problem is not that the salespeople make tons of money. Most of them don't. The biggest problem is that there are far too many salespeople trying to make a living on far too few sales.
Actual work in listing and selling your house consists of , a consult to come to an agreement on fair market value, writing up the listing agreement, taking pictures and filing it with the administration and getting copies back to the client. Putting up the sign and write up the ad for the paper. This first stage should not take more than three hours (max.) to complete.
The second stage is the processing of the offers that are to be considered. If the marketvalue appraisal was done correctly, chances are that the second stage can be wrapped up in less time than it took to get things set up.
In other words, no matter what, the whole process should never take more than ten hours in total.
Considering the fact that the whole training could be done in six months (it usually takes at least a year of part-time studies) and anybody with a grade 12 education should sail through it, remuneration should certainly not exceed that of a skilled trades person at $50/hour.
If the selling of your house takes a maximum of ten hours active work it is easy to see that even with an overhead added in at a further $50. the commission should definitely not have to exceed $1000.
As it is the commission works out to be in excess of $1000.- per hour.
One salesperson could easily handle ten sales per month and still have lots of time to go fishing. As it is he/she spends hours one the phone networking and cold calling to drum up business..
There must be a better way folks! A lot cheaper and a lot efficienter.