Doing it yourself – the self led MLS listing
We are all looking to #save money, especially in a time of deals aggregators, coupon websites, etc… And yet, the one industry where this consistently seems to not happen is realty.
realtors are NOT inventive or innovative
What other realtors will tell you
Here is a typical example of how you might list your home in 2018.
11am
The realtor arrives at your house, introduces themselves and proceeds to compliment you on some of your choices. They likely have a briefcase or bag of some sort and are ready to present to you (as this is, after all, a sales call with a huge amount of marketing – of themselves).
11:05am – 11:15am
The realtor asks for a tour of the house so that they can get a sense of what you might be contracting them for. They may or may not jot some things down in a notebook or notepad.
The good realtors will, at this point, make sure to point out a few of the flaws of your home while keeping an overall jovial mood to the whole meeting.
11:15am – 11:30am
The realtor generally sits at your kitchen or dining room table, you offer them water (or maybe coffee) which they accept. They now pull up a booklet or possibly an iPad on which they have their standard listing presentation. Most often, the listing presentation will include these common slides:
Believe me when I tell you, realtors are NOT inventive or innovative (for the most part). They generally take the same listing package to every deal, they treat you like a transaction and they try to get the most #commission out of you that they can.
This led to an uproar in consumer advocacy and people really started to get upset at realtors for what they charge.
What were your options prior to 2010?
In Canada, not much. Prior to 2010, the whole #market was set up to dissuade any home #sellers from ever doing this on your own. There was no avenue to get on #MLS and selling a #property yourself without being on the “market” that mattered was foolhardy.
I had done quite a few deals where I spent maybe five hours total working on the deal. I never saw the house. My client found it online and, you know, I would make $12,000 for four hours of work. And I thought this cannot keep going on like this. Someone, I felt like I was going to get caught! You know, someone’s going to see that this is happening and I think a lot of them hold that truth inside of them right now. They’ve got the clients that are finding houses on their own. They make $20,000 and did 10 hours of work
If you were smart enough to strike a deal with a realtor, you might be able to get some cash back at closing for doing most of the work, but these schemes were very rare and most realtors would just flat out say no.
Competition Bureau steps up
The on September 30, 2010, the ruling from the Competition bureau came down on the realty industry.
Melanie Aitken, the commissioner of the Competition Bureau has had her way and has been successful to break what she termed a “monopoly.
So what actually changed? As of the fall of 2010, sellers can now pick and choose the level of service they want from a realtor. Under the agreement, CREA eliminated its ability to adopt anti-competitive rules that discriminate against #real estate agents who are hired by consumers only to list or merely “post” a residential property on the MLS.
Mere listings
And that’s where the term “#mere” posting (or listing) comes from. It is due to the ability of an agent to ONLY (or merely) post your listing on MLS (the market) without having to sign you up for a full commission deal (i.e. 5.1% on average).
| Your House | What we charge (minimum listing) |
What a typical MLS Agent charges (5%) |
Your savings (before offering a buyer’s agent commission) |
What you could buy with the savings |
|---|---|---|---|---|
| $250,000 | $49 | $12,500 | $12,451 | All new top of the line appliances for your new home’s kitchen. |
| $500,000 | $49 | $25,000 | $24,951 | New flooring premium hardwood flooring in your new home. |
| $750,000 | $49 | $37,500 | $37,451 | A full gut and kitchen remodel in your new home. |
| $1,000,000 | $49 | $50,000 | $49,951 | Underpinning your short basement in your new home. |
| $1,500,000 | $49 | $75,000 | $74,951 | A new BMW X5. |
| $2,000,000 | $49 | $100,000 | $99,951 | An addition to your new home. |
All the amounts above are also before HST – so image paying HST on $50,000 vs $49. That’s yet more savings and more advantage of using a #mere listing on a service such as ours. Of course, the “what you could buy with the savings” column is there as an example – most people use that money to put into their new home (imagine being able to afford a home that is $50,000 outside of your range because of the savings you realized with us).
imagine being able to afford a home that is $50,000 outside of your range because of the savings you realized with us
What realtors actually do
Now that this method of listing exists, why is it that there are not a huge amount of mere listings on the market? Well, as mentioned previously in this blog post – regarding why realtors charge so much the majority of realtors spend an inordinate amount of money marketing themselves. Further, the companies for which they work do not plan to hurt their bottom line by offering a la carte services, such as mere listings.
Steve Ladurantaye of the Globe and Mail says “While a deal between the Competition Bureau and the Canadian Real #Estate Association means agents will be able to break real estate services into small, individually priced chunks rather than charge a set commission for a complete #sale, companies such as Royal LePage don’t plan to offer à la carte services.
To complicate matters further, as a seller (using #FSBO, #DIY or a discount brokerage), you have to be aware that, even though realtors have a duty to show ALL properties that match their buyer’s criteria, in practice, realtors often refuse to show buyers these properties as they are solely incentivized by their commissions.
Properties that meet buyer’s criteria
19. If a brokerage has entered into a representation agreement with a buyer, a broker or salesperson who acts on behalf of the buyer pursuant to the agreement shall inform the buyer of properties that meet the buyer’s criteria without having any regard to the amount of commission or other remuneration, if any, to which the brokerage might be entitled. O. Reg. 580/05, s. 19.
What you don’t want to do is the following:
How can you best navigate this mess?
Don’t trust what realtors tell you, ever. They are salesmen, much like a door to door vacuum salesman of the 1950s. In fact, they often have less training than the door to door salesman would. They are also fully incentivized to push for more commission rather than saving you money.
That’s where we differ from all the realtors. We are investors first and know how commissions eat away at your bottom line, whether you are an investor or a humble home owner.
If you have any questions about commissions, FSBOs, DIY, mere listings, etc… we’re here to help!
