Recently, I’ve had a lot of questions about changes to the way Realtors can offer their services and the Multiple Listing Service (MLS) and how this will affect people buying and selling houses and condos in Waterloo Region. As it is a big issue with lots of implications and unknowns, here is a list of questions I’ve recently been asked and my answers.
Q: What changed?
A: There was an agreement reached last week between the Federal Competition Bureau and the Canadian Real Estate Association. It centers around the MLS system – the database for all homes listed for sale (except exclusively or privately) in Canada – the go-to site for home shoppers and home sellers. The changes affect the way realtors can charge for their services and the way consumers can buy and sell houses and condos.
Q: More specifically?
A: Prior to last week, consumers (home sellers) really only had two main choices:
They could hire a full-service Realtor or
They could pay a “for sale by owner” franchise for help
Q: What do you get for your money with “for sale by owner” companies? How will these new rules affect them?
A: In the past, “for sale by owner” companies, offered advice about house selling, things like how to put an ad in the newspaper and how to hold an open house. They charged a flat fee and gave consumers lawn and open house signs. They also put your house up on their “by the owner” websites.
Q: And how did using a Realtor work before?
A: Realtors were restricted to offering “bundled services” and were always paid by a percentage of selling price. Home sellers could only hire a “full-service Realtor” who in Kitchener Waterloo was normally paid 5%-6% commission when the house sold. If the house didn’t sell, the Realtor didn’t get paid. The bundled services of a Realtor include: pricing consultation, advertising, real estate board paperwork, picture taking, placing “For Sale” signs, holding open houses, fielding all calls from Realtors and home shoppers, scheduling showings, negotiating with potential buyers and their agents, arranging home inspections, introducing real estate lawyers, answering questions and giving advice.
Q: So what has changed now?
A: Realtors are now able to offer home sellers a “shopping list” of services that they can choose from. If you want to sell your home yourself, but know that you want to be found on MLS, for a flat fee your Realtor can do that that for you. Consumers can decide which professional services they need/want from their Realtor and which they don’t. For example, consumers can choose to do their own marketing and advertising and hold their own open houses but might be more comfortable having a realtor negotiate on their behalf when an offer is presented. They may also hire a Realtor as a professional consultant, or add services as needed.
Q: How will this affect the Realtors and private home selling companies?
A: It will certainly give home sellers more choice. There was a large gap between the do-it-yourself home sellers and the services offered through professional realty brokerages. These changes mean, depending on time and comfort level of home sellers, they can choose what they need and want and can leave the rest behind. From picking up a “For Sale” sign at Canadian Tire to full agency, and everything in between is available now to those thinking about selling their home.
If you’re thinking about selling your home and want to have a chat, please give me a call. I’m here to help in more (or less) ways than ever.