# Long overdue



## MacDoc (Nov 3, 2001)

> *Owners' Web Gives Realtors Run for Money*
> 
> By JEFF BAILEY
> MADISON, Wis. - Across the country, the National Association of Realtors and the 6 percent commission that most of its members charge to sell a house are under assault by government officials, consumer advocates, lawyers and ambitious entrepreneurs. But the most effective challenge so far emanates from a spare bedroom in the modest home here of Christie Miller.
> ...


http://www.nytimes.com/2006/01/03/r...=1136264400&partner=homepage&pagewanted=print

:clap:

This is LONG overdue. Artificial property values are a disaster for society and vested interests bear much of the blame for that.
Time to break the cycle - this is a good start.

I live in a business universe where everything gets less costly and more effective every year, hell every month.
Time for housing to get with the more value for less money program 

BTW - for those interested - Levitt's book Freakonomics has a VERY interesting analysis of just how much of your best interest a real estate agent represents.

Here's the same analysis from Wired by Levitt and Dubner



> *Cracking the Real Estate Code *
> Is your agent really working for the enemy? A user's guide to home economics (and how to beat the expert industry).
> By Steven D. Levitt and Stephen J. DubnerPage 1 of 2 next »


http://www.wired.com/wired/archive/13.05/realestate.html

Good reading.... 

Time for change......


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## Mac4me (Aug 26, 2005)

Next time I want my furnace cleaned, remind me to call a plumber. 

Commission is no longer fixed at 6% and if you want to stick a FSBO sign on your front lawn and have every Tom, Dick and Harry plodding through your house without being accompanied by an agent that prequalified them - then good luck to you. No offense intended btw.


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## Derrick (Dec 22, 2004)

I think a larger concern for US real estate is the popularity of no-interest mortgages ... this is going to cause some serious fallout down the road in my opinion.


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## SINC (Feb 16, 2001)

Real estate so-called "professional" sales reps are no more than "used car salesmen with houses". They are leeches who have driven housing costs no where but up through greed.

Last time I tried to use one, she drove up in her Mercedes and made some stupid demands about making "upscale" changes to my property.

I sold privately and gave the buyer her outrageous fee as a discount. Felt good too. Would've bought the "lady" another winter holiday. Bet if she reads this applying make-up, she'll smear her $300 tube of lipstick all over her face.


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## MacDoc (Nov 3, 2001)

None taken- but there are better formulas and approaches if one accepts that housing inflation inevitable. 
Did you read the analysis in Wired???

A flat rate then a substantive reward for maxxing out value as an agent would do with their own house would certainly be a start.

Getting a high percentage on the amount up to FMV is ridiculous.

Getting rewarded for maxxing value is not.

The web breaks the lock on the distribution of information. many industries have had to face technological change and work harder to earn their income.

Every year we have to sell at least 30% more by numbers to get to the same income and many other industries face the same change. Hundreds of other industries face the same need to adapt to change.
No reason realtors should be sheltered.

If you look at the chain of vested interests in high land values from lawyers, to agents to municipalities wanting to levy property taxes it's dire.......and then the 30 year olds live with mom and the less fortunate crowd into small spaces.

We're in good company in this ranking - hopefully by being proactive we can keep it that way in our cities and provide affordable living spaces for the widest variety of incomes....not just the select few.









http://www.finfacts.com/irelandbusinessnews/publish/article_1000846.shtml

TANSTAAFL


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## Vandave (Feb 26, 2005)

Mac4me said:


> Next time I want my furnace cleaned, remind me to call a plumber.
> 
> Commission is no longer fixed at 6% and if you want to stick a FSBO sign on your front lawn and have every Tom, Dick and Harry plodding through your house without being accompanied by an agent that prequalified them - then good luck to you. No offense intended btw.


How do agents filter every Tom, Dick and Harry going through the house? How is their filter any better than the home owner themselves?

What do agents really bring to the table?

Appraisal?

No, it's easy to get this information from the government and is available on-line. Alternatively, an appraiser can be hired for a few hundred dollars.

Advertising?

No, everything goes on MLS anyways and more people look for real estate themselves this way.

Contractual help?

No, all the contracts are standard and a purchaser will usually specify the subjects. If one is worried, they can hire a lawyer for a few hours ($500).

Best Price?

No, I don't think so. Agents want to make a sell to get their commission. They don't care about price. If your place sells for $20K less, their commission is more or less the same. 


I think the current real estate model is outdated and was based on realtors holding all the information. With the internet and information age, I think home owners are now more empowered and can obtain information themselves. The agent is no longer the expert they once were. I think big changes are on the way for real estate companies. For example, some companies are making inroads with new business models... http://www.onepercentrealty.com/


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## MACSPECTRUM (Oct 31, 2002)

SINC said:


> Real estate so-called "professional" sales reps are no more than "used car salesmen with houses". They are leeches who have driven housing costs no where but up through greed.
> 
> Last time I tried to use one, she drove up in her Mercedes and made some stupid demands about making "upscale" changes to my property.
> 
> I sold privately and gave the buyer her outrageous fee as a discount. Felt good too. Would've bought the "lady" another winter holiday. Bet if she reads this applying make-up, she'll smear her $300 tube of lipstick all over her face.



yeah, "real estate whores"
most are about as educated as house plants
oh no, SINC and I agree, once again
my head is spinning


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## MacDoc (Nov 3, 2001)

And Vandave and I agree.......hell IS producing popsicles of a sudden 

Tho I suspect we might disagree on high property values as socially damaging. 

Anyone interested in alternative models to "commodification" and the history and debilitating cycles ( think farmers in the US west in the 30s ) can have a read here.

http://www.earthrights.net/docs/land4people.html

In a nutshell


> Holding land as investment property and a way to accumulate wealth is actually maladaptive to a market economy. This tenure approach has been identified as a primary cause of the maldistribution of wealth problem which is rampant in capitalist systems. Land can not respond to supply and demand dynamics. There can be increasing demand for land but there is never a corresponding increase of supply as the supply of land was determined aeons ago by whatever unfathomable forces of the universe created it.
> 
> The commodification of land and land speculation inflates land values to the point where those who have only labor to contribute to the productive process must pay ever higher amounts for access to land for shelter. Taxation placed upon wage labor further decreases purchasing capacity.
> 
> ...


Vested interests.....not livable affordable cities. 

Australia's capital Canberra is entirely leasehold to allow for long term planning, control *and avoidance of speculation*


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## Vandave (Feb 26, 2005)

MacDoc said:


> And Vandave and I agree.......hell IS producing popsicles of a sudden
> 
> Tho I suspect we might disagree on high property values as socially damaging.


After I made my post, I read the Wired article you provided a link for. It was almost identical to my thoughts.

You might want to read the latest edition of Wired in which they discuss oil. 

Are their social consequences to high land values? I believe so and it is a contributing factor to lower birth rates. Personally, I haven't started a family yet due to high prices in Vancouver. I could have worked outside of the city and moved somewhere else (say Alberta) which could have enabled me to start a family earlier. But it was a CHOICE and it wasn't forced on me.

I personally believe the market is the best way of setting prices. There is always a consequence to artificially changing a market resulting in an economic loss. The real market eventually finds ways of working around artificial obstacles (e.g. rent control in New York didn't work and paying people off was the way to get what you wanted).


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## Mac4me (Aug 26, 2005)

My oh my, I think some of the posters in this thread are "Long Overdue" for an education on the Real Estate Profession. You can start by checking RECO's website and get an idea of the educational requirements to obtain and maintain a licence (a lot more than "the brains of a houseplant").

http://www.reco.on.ca/site.asp?WCE=C=47|K=2235098|RefreshT=2235039|RefreshS=Container|RefreshD=22350391

As for driving Mercedes cars and the like, would you the buyer, want to be picked up at your home/airport/hotel and schlepped around all day by an agent driving a pick-up truck? 

Further, neither agents nor appraisers establish the value of a house - the market value is established by what the buyer is willing to pay and what the seller is willing to accept, period! 

Back to FSBO's..... Anyone driving by such a sign, has no idea what the seller is asking or if they can afford the home. The result is, strangers on your doorstep inviting themselves in to look around your home, whether they are bona fide buyers or not. A few weeks of tolerating that kind of nonsense, and the seller is on the phone to his local realtor begging to list his house. 

Agents spend a small fortune in advertising, with no guarantee that they will ever sell and collect the commission that everyone's so upset about paying. Ever check the cost of a picture ad in The Globe and Mail lately? Or better yet, the price of a house in some of the major US or European cities? Comparatively speaking, Canadian real estate is a bargain.


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## SINC (Feb 16, 2001)

Mac4me said:


> My oh my, I think some of the posters in this thread are "Long Overdue" for an education on the Real Estate Profession. You can start by checking RECO's website and get an idea of the educational requirements to obtain and maintain a licence (a lot more than "the brains of a houseplant").
> 
> http://www.reco.on.ca/site.asp?WCE=C=47|K=2235098|RefreshT=2235039|RefreshS=Container|RefreshD=22350391
> 
> As for driving Mercedes cars and the like, would you the buyer, want to be picked up at your home/airport/hotel and schlepped around all day by an agent driving a pick-up truck?


In Alberta in some cases, you bet!

But be honest here. A well appointed Camry or Malibu or Intrepid would serve very well and cost about 25% of the Merc.

It's an image contest between realtors and the loser is the seller who gets hosed on the commission. Long live FSBO!


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## Beej (Sep 10, 2005)

In some of Canada, www.comfree.com is a good alternative. Not for everyone, but good competition for real estate agents. It depends on what level of service you want, but either way sellers are going for the highest (net) price they can get, after allowing for time and hassel.


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## Vandave (Feb 26, 2005)

Mac4me said:


> My oh my, I think some of the posters in this thread are "Long Overdue" for an education on the Real Estate Profession.


What do realtors bring to the table that a person cannot do on their own? Educate me.


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## MACSPECTRUM (Oct 31, 2002)

Vandave said:


> What do realtors bring to the table that a person cannot do on their own? Educate me.


too much make up (which you could, but probably don't "want" to do)


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## ArtistSeries (Nov 8, 2004)

Mac4me said:


> My oh my, I think some of the posters in this thread are "Long Overdue" for an education on the Real Estate Profession. You can start by checking RECO's website and get an idea of the educational requirements to obtain and maintain a licence (a lot more than "the brains of a houseplant").
> 
> http://www.reco.on.ca/site.asp?WCE=C=47|K=2235098|RefreshT=2235039|RefreshS=Container|RefreshD=22350391
> 
> ...


Why did one of the real estate agents I dealt with have the brain of a pea then?
Seriously. When it came to signing the papers OUR real estate agent found out that the house had a lean on it? And if we had purchased it, we would of owned money to the banks? And the only way to make the deal happen was for the real estate agent to forgo 400$ - the pea brain representing the sellers would not budge on her commission (she was not even there except at the time of the sale). Our agent decide to split the difference missing and yet she still would not budge. 
She was a new agent, and I think that maybe puberty had not even come calling...
Some of the other agents I know, are only in it because they are bored housewives... 
And another thing - if an agent does not know an answer just say so - I have heard so many stupid comments.

As for setting up appointments - we surfed to MLS and told our agent to book visits - he basically did not have much to do. 

Don't tell me times are tough if an agent is driving a Mercedes. 

And if an agent is making say 1000$/hour for selling us a house, you can see where some resentment comes from - 

Maybe it's Quebec where the certificate is easy to get
http://www.acaiq.com/cgi-bin/WebObjects/AAVisuel.woa/wa/aller?langue=2&section=7&article=2551
where 240 hours of class work get you chance at a license...
and maybe if Remax did not make it sound so easy
http://www.remax-quebec.com/en/3/37/3_7.htm

Now, part of the problem maybe real estate agents trying to get too many people to buy house they can't afford - every agent trying to up-sell when we clearly stated our budget. I'm of two minds when it comes to 4% cash down for a house and having a bank be ready to lend you that money - sounds like people trying to make even more money.... 

In the end, we bought the house we wanted, paid 50% cash, borrowed the rest and learned to stay away from "flash agents", new agents....


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## Mac4me (Aug 26, 2005)

First off, any liens on a property are revealed in a Title Search which is carried out by your lawyer, not the agent. If you read your purchase offer, you'll see that you have X days to search Title before closing - its not your agent's nor the seller's agent's responsibility to Title Search. So if your lawyer did his/her job they would make you aware of any liens and write to the seller's lawyer requesting all liens be removed prior to closing. 
As to the issue of the type of car an agent uses - in most cases these cars are leased, not owned and written off against the expenses they incur driving buyers around/advertising/office expenses/lighting/heating/secretarial/administration/business cards/flyers/web sites/calendars/feature sheets/real estate board fees/gifts for their clients etc. etc. etc.

So you think an agent makes $1,000/hr by either selling your house, or selling a house to you? Hmmm - that would make sense, if the agent showed one buyer one house and clinched a sale. Unfortunately in the real world, this is not the case. Agents can work for weeks and months with buyers and sellers without making a dime, and with no guarantee of ever making a dime if they don't make a sale. Agents working in areas where the market is either slow, or non existant (Northern Ontario for example) are barely scraping out a living - its not all flash cars and big commission cheques, so get real people.


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## MacDoc (Nov 3, 2001)

> Further, neither agents nor appraisers establish the value of a house - the market value is established by what the buyer is willing to pay and what the seller is willing to accept, period!


The term "churning" comes to mind.

It's in the interests of the banks and real estate community and to a degree municipalties to continually see property values rise.

Why, in my industry and other,s is yearly offering better value, features, amenities FOR LESS MONEY considered a virtue while in the artifical world of real estate it's ever upward....and if it gets pushed past the pop point- well of course commissions don't fall on the down slide.

Agents are in "trust positions" and the continual inflationary pressure of commissions *and expections of future gain* on housing stock that is by nature limited is manipulative and damaging no less than securities sellers hawking stock prices.

Anyone care to list the fee rate that flows to various people, land transfers, lawyer fees, etc that are locked into a transaction?
And of course a high market value means local munipalities can garner higher property taxes.

Meanwhile 30 yearold lives with mom and proposed "affordable apartment" scheme in Mississauga ended up at $1200 month for a two bedroom......and don't ever tell me it was construction costs underlying that.

Mayor Hazell laughed at the concept and rightly so. That's NOT affordable to the wage earner underlaying our economy.

$4,000 a linear foot for a serviced lot is just plain the result of speculative pressure and the real estate community, along with a few other equally vested interests bears responsibilty.
No less than DeBeers bears responsibility for the artifical pricing of diamonds.

At least diamonds are discretionary - affordable housing is not


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## ArtistSeries (Nov 8, 2004)

Our agent spent a total of 6 hours with us (this included signing papers). With the commission he made, it was actually over 1500$/hour. The snafu was discovered at the notaries. The liens was placed by creditors. 
If it's not the realtors job, what is it that they do exactly? Because to be perfectly honest, they seemed to get in the way and we ended doing most of the work ourselves and/or paying others...

If a realtor decides to lease a flash car, then they are only cutting into their own profits. Most realtors belong to firms and share expenses. 
Gifts for clients? Wow, I'd really like to get mine if they are expensing that. What kind of gifts?


MacDoc, don't forget to add "welcome tax", inspectors fees, insurances, bank fees, brokers fees, Mortgage application fee, Deed Transfer tax...

And we can add moving fees, hook up fees, and of course most houses will need a few renovations/repairs...


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## MacDoc (Nov 3, 2001)

Yeah can we actually get a "follow the money" chart here - including things like mortgage transfer costs etc.

Why are property searches not 100% automated online these days.? ( maybe they are in which case why are closing costs so high ).



> Comparatively speaking, Canadian real estate is a bargain.


That's a bull**** approach - it just means those areas are impacted in a far worse manner.

The chief economist in Australia thnks it will take 15 years for wages/incomes to catch up with housing costs.

There is this mythic thinking that high property values are somehow good and no one feeds that myth better than real estate and the associated vested interests that benefit from an never ending upward spiral.

One has only to look at Japan for the dire consequences of that when the musical chairs game stops.......


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## jasonwood (Oct 19, 2003)

It's good to be informed about the alternatives that are available (and it's good for the market that they are in fact available), but all this realtor bashing is really pointless. Why not just let the market work it out???

Clearly some people will prefer to pay for a realtor while others would rather do it themselves. It's a personal choice. There's no right or wrong. If more people decide to do it themselves, the realtors will have to rethink their strategy.

If you don't like realtors, don't use one. No need to insist that they are a greedy, lower form of life.


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## nxnw (Dec 22, 2002)

The agent who househunted with us for 2 years, helped us buy the lot we built on, and sold our last house and my my father's house, earned every penny.

Sure, some agents are dead weight, but every industry has its own share of slugs.


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## MACSPECTRUM (Oct 31, 2002)

if housing prices were kept more in line with working wages you might be able to get people to retire or semi-retire at an earlier wage which means younger people get migrated into those positions
if I still lived in Toronto I would be heavy into a mortgage, but with my move to Shangri-La, my house is paid for and so is my car
not having to live under the cloud of a big mortgage has made my life less stressful and i can take more time off and enjoy the fresh country air via golfa and sailing while i am still relatively young and healthy
of course i don't have a spouse or children and that makes things a lot eaiser

it would certainly do the economy well to have lower housing prices, unless you are holding bank stocks or mortgage mutual funds

i also hypothesize that rising house prices reduce the entrepenerial spirit since someone or a couple with 2 kids, 2 cars and a big mortgage can't risk starting a business and that makes RevCan (read Gov't) and banks very happy

small business owners can write off a whole lot more than fully employed people

and how about this?
if housing prices were in line maybe we could move to a 4 day work week and cut into unemployment which in the long view gives the gov't more money through income tax

if the gov't really cared about helping canadians gain home ownership the very least would be to allow the deduction of your mortgage interest on your primary home


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## Beej (Sep 10, 2005)

MACSPECTRUM said:


> if the gov't really cared about helping canadians gain home ownership the very least would be to allow the deduction of your mortgage interest on your primary home


That would further increase prices. It would be interesting, and complex, to measure though...even more interesting if I got tipped beforehand.


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## SoyMac (Apr 16, 2005)

I've heard from very reliable sources, the stories of slothful and/or unethical and predatory agents. I guess I've been lucky. My agent steered/steers me away from far more properties than he directs me toward. He points out all the problems with a potential purchase, including structural problems, esthetic issues, and future developments for the neighbourhood. He is worth his weight in gold to me and I would never dream of purchasing a property without his services. I guess that's why he is always in demand, and yes, he drives a nice car. 
I know, MacDoc, that the larger economic issues you've raised would not be addressed by the following, but maybe the real estate industry would be populated by fewer pirhanas if there was a transparent and accessible review and rating system of agents.


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## RevMatt (Sep 10, 2005)

'course, first time homeownership continues to be further delayed what with the student loans that we young 'uns are emerging with...


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## MacDoc (Nov 3, 2001)

What might surprise you is after a couple of duds we have an excellent agent who accomplishes the goals quickly and done so consistently over time.
That does not address the structural problems of inflated property values and the damage it does nor the industry's role in fostering and sustaining the "expectations".

Leslie comes off as an efficient well spoken neighborhood mom. That she has the wealth to own 3 or 4 rental properties ( and has sold them at the peak of course ) is a result of being an insider in an industry that has not been subject to more value for less money.

A business employing people can hardly get the time of day from banks - but a piece of dirt is somehow endlessly fascinating to them. Screwed up system indeed 

•••••



> the student loans that we young 'uns are emerging with...


If you followed the trail of that situation you might find it ends with overly expensive property values - many aspects of the inflation do. In many ways the inflated costs get passed down to the next generation as in this case.

In Japan during the worst of the bubble there were 50 year multi-generational mortgages. The effect overall is to turn average and lower income workers into tenants despite the illusion of freehold.

TANSTAAFL.


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## Mac4me (Aug 26, 2005)

Again, I say, its not agents that inflate property values, its the law of supply and demand and how much a buyer is willing to pay and seller willing to accept. If you want a cheap house, go to an area where there have been mine closures/layoffs, where the average house price is $15,000 and the agent's commission is peanuts. No? No, of course not, *everyone* wants to live in urban areas and at the same time expects "affordable housing". Sorry folks, it ain't happening but stop blaming agents for the influx of people to major centers and resulting demand on a limited housing stock.

In response to the earlier poster, re gifts. I was referring to a common practice of buying clients a housewarming gift. Maybe you should check with your agent for yours, obviously its "long overdue" too.


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## SINC (Feb 16, 2001)

Mac4me said:


> In response to the earlier poster, re gifts. I was referring to a common practice of buying clients a housewarming gift. Maybe you should check with your agent for yours, obviously its "long overdue" too.


I have owned six houses and all were sold through an agent because that was the rule in my company when accepting a transfer.

Three of those houses were in Ontario and the other three in Alberta. Not one real estate ever bought me a housewarming gift, so I submit the practice is hardly "common".


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## ArtistSeries (Nov 8, 2004)

Mac4me said:


> If you want a cheap house, go to an area where there have been mine closures/layoffs, where the average house price is $15,000 and the agent's commission is peanuts. No? No, of course not, *everyone* wants to live in urban areas and at the same time expects "affordable housing". Sorry folks, it ain't happening but stop blaming agents for the influx of people to major centers and resulting demand on a limited housing stock.


Aren't we full of stereotypes today...
Not everyone want to live in "urban" areas.
The rant was mostly about ineffectual agents and their "stranglehold" on real estate. 
So far, your defence of them has cemented my belief that many are nothing more than social parasites on the market. 
So what you are saying is that the "raw" cost of material for a house has nothing to do with the price of it? 




Mac4me said:


> In response to the earlier poster, re gifts. I was referring to a common practice of buying clients a housewarming gift. Maybe you should check with your agent for yours, obviously its "long overdue" too.


Thanks for clearing that up. Maybe my agent felt that I would not be bedazzled by shiny trinkets and such...
Not that he pays for it - it is a tax deduction...


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## Vandave (Feb 26, 2005)

Mac4me said:


> ...


Care to answer my question? 

What do realtors bring to the table that a person cannot do on their own? 

Or in more simple terms... Why should somebody hire a realtor? Sell me.


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## Beej (Sep 10, 2005)

ArtistSeries said:


> So what you are saying is that the "raw" cost of material for a house has nothing to do with the price of it?


The value of the space (location, location, location) is a major factor. The less valuable the space, the more dominant the materials and labour cost will be (proportionally), but they would generally set a minimum price, except in the case where a market goes through a very bad crash.


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## MacDoc (Nov 3, 2001)

The problem is locked in vested interests the cost of the materials is a very small portion against the cost of the land and it's a restricted market - not a free market at all. It's being exploited and agents are part of that vested interest group.

In Canberra the capital of Australia the land is held entirely by the crown and offered out on long leases. The cost of the buildings then reflect value of the developed site NOT THE DIRT UNDERNEATH.

THEN progressive developers offering green buildings and advanced technologies could participate in a truly competitive marketplace instad of the artificial monstrosity that exists now and cities could build infrastructure improvements into lease income.

Look at the horrendous situation with taxicab licencing in Toronto to see the kind of poor results speculation in limited /restricted resources ends up with.

A few really wealthy licence holders, poorly maintained cabs, poorly paid and overworked drivers.

Not my kind of society. 

How many agents have ever said to a buyer their purchase will worth less next year.
There's always the underlying message "you'll do well with this property".

Screwed, churned system 

Every $50k speculative rise comes out of the pockets of the kids and lower income families. Might as well tour the city and ask for a few dollars from each them directly.

Then the complaints start when the garbage or maintenance workers go on strike.
TANSTAAFL


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## Mac4me (Aug 26, 2005)

Reply to Vandave:
1)As a seller your agent will has access to recorded sales and active listings in your neighbourhood. This info. is reviewed with you to determine the most effective list price for your home.
2)He/she will screen his/her potential buyers before wasting everyone's time showing the property to unqualified people and/or tire kickers.
3)He/she will provide you with valuable buyer feedback (things the buyer wouldn't tell a FSBO). Feedback which can be applied to fine tune your marketing strategy if necessary.
4)He/she will advertise the property in all available media (with no guarantees that they will recoup if the house doesn't sell). They will hold Open Houses for their colleagues and the public (if you want), to maximize exposure in the marketplace.
5) Offer presentation - he/she will provide you with guidance and advice in negotiating offers, interpreting clauses and their implications, and assist in all phases of the negotiations, protecting your interests in the process.

As a seller, you will likely also be a buyer.
1) He/she will determine your housing needs,affordability, suitability of various neighbourhoods,
2) will select appropriate houses that fit these needs and not waste your time looking at unsuitable properties. 
3) will draw up an agreement to purchase, ensuring that all appropriate clauses for your protection, are part of the offer.
4) will present the offer, multiple times if necessary, to the seller and their agent, 
5) will attend with you at the home inspection (that you should have in your offer), will assist you in arranging financing if required, will attend with you at your pre-closing inspection (if pre-arranged in your purchase offer), will make sure the seller meets their obligations under the terms of the contract (i.e. water tests etc).

I could go on, but time to go home....


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## Beej (Sep 10, 2005)

Many people value the services of a good agent. It seems pretty clear that the services a good real estate agent provides are valuable, and most people opt to use them despite not having to. 

Some people prefer the do it yourself approach and/or have experienced bad agents. This is not, in any way, unique to real estate, and it is difficult to know you're getting a good agent. Like with mechanics, electricians, plumbers, home improvements etc. word of mouth and, more recently, word of web, are invaluable tools. Ask for references, call the references, discuss things important to you.

Learning how to do it yourself can also be a worthwhile learning experience, but it's not for everyone. Do what you think is best for your situation.


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## Vandave (Feb 26, 2005)

Mac4me said:


> I could go on, but time to go home....


Drive home in your Mercedes so that you can apply more make-up and do your nails? Lazy realtor.... :lmao: Just kiddin. Couldn't resist.


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## ArtistSeries (Nov 8, 2004)

Wow, this should be fun.



Mac4me said:


> 1)As a seller your agent will has access to recorded sales and active listings in your neighbourhood. This info. is reviewed with you to determine the most effective list price for your home.


In other words, price fixing? 
Of course agent will want a little more than fair market value - it is their commission they are working for...

Mac4me, this is a valuable service.



Mac4me said:


> 2)He/she will screen his/her potential buyers before wasting everyone's time showing the property to unqualified people and/or tire kickers.


Pray tell? 
In other word you want people with a pre-approved mortgage. Something that buyer usually get on their own.
I have never had an agent refuse us to see a house or have an agent ask us for financial statements... 

3)He/she will provide you with valuable buyer feedback (things the buyer wouldn't tell a FSBO). Feedback which can be applied to fine tune your marketing strategy if necessary.[/QUOTE]
Basic sales 101....





Mac4me said:


> 4)He/she will advertise the property in all available media (with no guarantees that they will recoup if the house doesn't sell). They will hold Open Houses for their colleagues and the public (if you want), to maximize exposure in the marketplace.


Did you not just say that you try and pre-screen people before they visit houses. What's the point of an open house then? Why even bother with the time...
Most houses on the market sell no? Just reduce the price...




Mac4me said:


> 5) Offer presentation - he/she will provide you with guidance and advice in negotiating offers, interpreting clauses and their implications, and assist in all phases of the negotiations, protecting your interests in the process.


But be held responsible for none, as bankers, lawyers, notaries and a slew of others will be there. Don't worry, none of those guys will take responsibility either...





Mac4me said:


> As a seller, you will likely also be a buyer.
> 1) He/she will determine your housing needs,affordability, suitability of various neighbourhoods,


I want a big house, we need 4 bedrooms - next...
How much can you afford to pay per month?

I have yet seen an agent say "don't buy here, it stinks" but whatever...





Mac4me said:


> 2) will select appropriate houses that fit these needs and not waste your time looking at unsuitable properties.


Plain common sense - too bad I had to tell my agent where to look...





Mac4me said:


> 3) will draw up an agreement to purchase, ensuring that all appropriate clauses for your protection, are part of the offer.


cookie cutter template contract that you take no responsibility in - that's the lawyers/notaries job...




Mac4me said:


> 4) will present the offer, multiple times if necessary, to the seller and their agent,


A useless go-between....





Mac4me said:


> 5) will attend with you at the home inspection (that you should have in your offer), will assist you in arranging financing if required, will attend with you at your pre-closing inspection (if pre-arranged in your purchase offer), will make sure the seller meets their obligations under the terms of the contract (i.e. water tests etc).


House inpection is done by someone else.
Mortgage brokers. again...

So basically good for some and of extremely dubious value to others...


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## Mac4me (Aug 26, 2005)

ArtistSeries, you've obviously got a very one-sided jaundiced view of realtors and anything I say will be mis-intrepreted by you to support your own views. So I'm not going to waste any more of my time debating this topic.

Vandave FYI I'm not a realtor, but yeah, I got the humour


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## SINC (Feb 16, 2001)

So, it's settled then? All realtors are leeches? Good. Let's start a thread about positive people. How about used car sales people? Hell, let's go all out and start one about honest lawyers. Whoops sorry, got into a fantasy there for a minute.


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## Beej (Sep 10, 2005)

SINC said:


> So, it's settled then? All realtors are leeches? Good. Let's start a thread about positive people. How about used car sales people? Hell, let's go all out and start one about honest lawyers. Whoops sorry, got into a fantasy there for a minute.


Sinc, we all know gross generalizations are innappropriate and, well, worse can be said of them (and have been said). For some groups however...fair game? Gotta love this forum. 


[Edit: There are no double standards here...move along. Especially you dirty *insert group* with your *insert slur* causing *insert grand theory of wrongness*]


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## SINC (Feb 16, 2001)

Beej said:


> Sinc, we all know gross generalizations are innappropriate and, well, worse can be said of them (and have been said). For some groups however...fair game? Gotta love this forum.
> 
> 
> [Edit: There are no double standards here...move along. Especially you dirty *insert group* with your *insert slur* causing *insert grand theory of wrongness*]


:lmao: :lmao: :clap:


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## Jordan (Jul 20, 2002)

ProperyGuys.com


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## Vandave (Feb 26, 2005)

Mac4me said:


> Reply to Vandave:
> 1)As a seller your agent will has access to recorded sales and active listings in your neighbourhood. This info. is reviewed with you to determine the most effective list price for your home.
> 2)He/she will screen his/her potential buyers before wasting everyone's time showing the property to unqualified people and/or tire kickers.
> 3)He/she will provide you with valuable buyer feedback (things the buyer wouldn't tell a FSBO). Feedback which can be applied to fine tune your marketing strategy if necessary.
> ...


Thanks for the response. The point I wanted to make is that nothing in your list is proprietary. A person could do all these things themselves. Much of this information is readily available over the internet. I am not sure a 6% commission is justifiable for most properties.

I have to take exception to point 2 in regards to screening. I have looked at at least a dozen properties on my own by cold calling realtors. Not once did they attempt to screen me in any way.


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## MacDoc (Nov 3, 2001)

One thing that Macspectrum and I were noting the other day is why is it that a realtor can AFFORD individual billboard advertising.
Busted system due for some change.

An associate paid $27,000 in transfer tax the other day  along with numerous other fees.

Realtors expect a "high turnover" year in 2006. Rubbing of hands in glee at too many vested interest tables. 

I say to a client - "look how much you get for how little money these days".

Where is that thinking in housing???


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## Laptop Surgeon (Mar 4, 2004)

there are realtors in BC and Alberta that charge 1/2% for listing commission.
this allows for FSBO types to have MLS.ca exposure. This of course is a no frill minimum service type of a listing contract, where the seller has to pay for advertising, forms, signs on a per use basis. Seller is still responsible for the cooperating broker commission (the agent who bring the buyer) on top of the listing commission, in the GTA(Toronto) this is typically 2.5% of the sold price plus GST. May differ in BC where they have a slide scale for commission. i think it is 3.5% for the first 100,000 and 1.25% for the balance of the price. 

in the major canadian cities, consumers have not been paying 6% for quite a while.


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## Paul O'Keefe (Jun 3, 2005)

Man I got a swell house in good ole Newfieland for dirt cheap compared to city-dwellin' folk. If we lived around da 'Bay, we'd get 'em even cheaper still. Then we had a flood and 150 families including ourselves were evacuated.

Over three months later most of them are still out. 10 to 20 families are back in their own homes. Us included.

You might have seen a story about the whole situation of Hockey Day in Canada in Stephenville, NL.

My point? I don't know. We just bought the house, renovated a little, moved in, had a house warming party, and then got hit by a big flood. No point really.

We had no trouble really buying the house. Our trouble was selling the house my girlfriend had. We were a little desperate to sell... what with paying two mortgages. People called our realitor to make viewing appointments and instead of calling us to set up a viewing time (at any time as we instructed them to do) they told the potential buyer that it would take a day or two to set up a viewing. Which was total bull. All it would take was a phone call. 

The girlfirned had it sold through this realitor at one point and the seller backed out at the last minute and barely gave us any service or feedback. We eventually got another realitor that my girlfriend used before and she did good by us and sold the house to the couple who got cold feet before.


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## MacDoc (Nov 3, 2001)

The BC system is a start but I think you'll find if you do a "follow the money" the total will be well beyond 6%.


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## Vandave (Feb 26, 2005)

MacDoc said:


> I live in a business universe where everything gets less costly and more effective every year, hell every month.
> Time for housing to get with the more value for less money program


Would you also agree to this concept for government services, including health care?

It seems to me that government is sheltered from providing value and finding innovations due to a lack of market pressures.


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## ArtistSeries (Nov 8, 2004)

Vandave said:


> Would you also agree to this concept for government services, including health care?
> 
> It seems to me that government is sheltered from providing value and finding innovations due to a lack of market pressures.


No, because there has to be a minimum threshold for quality. In the private industry some would not ensure proper care for "loss leaders" such as healthcare. The same can be argued for public work projects such as roads - how do you assure decent quality and value? So while I do agree for certain sectors, I don't think it applies across the board.


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## Laptop Surgeon (Mar 4, 2004)

if the seller thinks he can sell his own home and save on the listing commission, and get just as good a price as a realtor would then by all means sell it yourself.

FSBO systems also advice seller to pay realtors to bring in clients. So the FSBO system saves the listing commission only. The cooperating broker commission is typically 2.25 to 2.5% around the GTA. No skimming on that rate, otherwise the agent simply forget your property.

Full service MLS commission around the GTA is typically 4 to 5%. the odd realtor would go as low as 3.5% for both listing and cooperating commissions.
you get what you pay for though.

It is very hard to act for yourself when it comes to selling your own home. It is not uncommon for realtors to list their own home with agents in their own office and pay full commission.


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## Vandave (Feb 26, 2005)

ArtistSeries said:


> No, because there has to be a minimum threshold for quality. In the private industry some would not ensure proper care for "loss leaders" such as healthcare. The same can be argued for public work projects such as roads - how do you assure decent quality and value? So while I do agree for certain sectors, I don't think it applies across the board.


Government needs to become more process oriented. You first have to define what service or product you are trying to deliver and then design a process around it. Once you frame it that way, you can gain tremendous efficiency. Processes should be routinely evaluted to make sure they are doing what the consumer wants. 

The same thing could work for Health Care. Right now we have operating rooms and surgeons that do all sorts of tasks. If you have to do a hip replacement, you book an operating room along with various technical experts. The prep to do such a surgery takes hours as does the finish. This is really wasted time. But, the perception of nurses and doctors is that they are working flat out. There is a big difference between working smarter and working harder.

We should have operating rooms that only do hip surgery . Do one after the other. Turn it into a production line. Henry Ford knew this approach worked.

My father told me a story about going to an eye clinic in India. He said they could do a cataract surgery in minutes and had a tonne of people lined up ready for their turn. How long would that take here?

There is no incentive to think outside the box, not that my example really fits that because it seems like an obvious start.


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## MacDoc (Nov 3, 2001)

Vandave - there are some parallels but I suggest you repost that last point to a new thread as it's worth a discussion.
At one time doctors held too strong a monopoly on certain services that HAS changed with the emergence of such as nurse practitioners.....but flip that to a new thread as we are not talking 12 years in school and more in internship.


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## MacDoc (Nov 3, 2001)

> Trustbusters surround industry
> 
> May 10, 2005
> News analysis: Behind the charges of real estate antitrust
> ...


http://www.alta.org/indynews/news.cfm?newsID=2776

as I was saying........


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## _Outcast_ (Oct 17, 2003)

MacDoc said:


> One thing that Macspectrum and I were noting the other day is why is it that a realtor can AFFORD individual billboard advertising.
> Busted system due for some change.
> 
> An associate paid $27,000 in transfer tax the other day  along with numerous other fees.
> ...


 The $27000 in Land Transfer tax your client paid was not imposed by the realtor it was imposed by the Provincial Government. You seem to think that realtors are responsible for any and all charges associated with purchasing or selling a proerty and this is just not the case.

The commission on a residential sale in Ontario is typically 5%. Most people think that the salesperson gets that entire 5% which is wrong. The 5% is split between the listing brokerage and the selling brokerage (the buyer's people) so each brokerage will receive 2.5%. Each salesperson will receive a portion of that 2.5% based on their agreed upon commission split with their broker (their boss). Typical splits are 60/40 but can also be as high as 95/5 depending on the arrangement the salesperson has worked out with their broker. So in the case of a 60/40 split if the selling brokerage's 2.5% works out to $7500.00 from the sale of a $300,000 property the salesperson would receive $4500. Sounds like a lot of money and it is to a point. The salesperson may have spent months finding homes for his buyer to see, taken his buyer to see these homes, submitting offers, etc. On the other side the listing salesperson is responsible for marketing the listed home. Most people think merely having the property listed on MLS is advertising enough. Sometimes that's true. Other times however ads are taken out in newspapers, etc. and who do you think pays for those? Not the broker, the salesperson.

Everybody thinks real estate salespeople all make a killing. Some do but most don't. I'll try to dig up the source but there was a statistic published a couple of years back that showed the average real estate salesperson made $24,000 per year. Many do better than that but some also do worse. 

Also, it takes some serious effort to get your licence in the first place now. Not like the good old days where you took a three week course and we're turned loose on the world. It takes up to 18 months to get your provisional licence these days and then you have up to another two years to complete the required courses to receive your full licence. Times have changed. Still, that's no guarantee you're going to get someone who will live up to your expected level of performance. You need to find someone who will work with you and for you. Ever run into a bad mechanic or a bad contractor? Same thing in real estate. You need to choose a salesperson wisely.

That being said, there's absolutely nothing to prevent anyone from sticking a FSBO sign on their lawn and doing their own deal. I'm sure many do and some even do OK by it. If it were up to me I'd take the 5% hit and let someone who is trained to do the job sell my house. I'm confident they can do a better job than I would. That's what I pay them for after all.

Jerry


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## Beej (Sep 10, 2005)

_Outcast_ said:


> Jerry


Your post is too reasonable. Please edit it to include inflammatory and baseless rhetoric. 
:lmao:


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## ArtistSeries (Nov 8, 2004)

_Outcast_ said:


> Everybody thinks real estate salespeople all make a killing. Some do but most don't. I'll try to dig up the source but there was a statistic published a couple of years back that showed the average real estate salesperson made $24,000 per year. Many do better than that but some also do worse.


How many of these were part-time agents? Please try and did that up - it would be interesting.
Happy Beej? a legit question.


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## Beej (Sep 10, 2005)

ArtistSeries said:


> Happy Beej? a legit question.


Quite, thank you. That sort of statistical fun has been used to overstate CEO salary multiples.

The basic point remains about doing it yourself. Regulations may unreasonably favour agents, but that is far from some of the 'logic' here. Maybe the process for do-it-yourselfers needs streamlining. But, at least from what I've seen, no one is forced to use agents.


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## MacDoc (Nov 3, 2001)

> The $27000 in Land Transfer tax your client paid was not imposed by the realtor it was imposed by the Provincial Government. You seem to think that realtors are responsible for any and all charges associated with purchasing or selling a proerty and this is just not the case


Oh I'm quite aware of it - it's the embedded interests which includes the municipalities, lawyers etc that set up the mindset and churn the system along with the agencies themselves.

The system sucks and as shown with some of the anti-trust cases emerging will get hit just the way the "embedded" interests in brokerage houses etc got hit.

Overdue.

The mindset of ever increasing property values and the locked in mechanisms favouring a few "interested parties" needs breaking.


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