There seems to be a rash of media articles criticizing real estate agents and what they do recently. Why is this?
Fundamentally, real estate commissions have risen exponentially over the years. They have out-paced other types of goods and services related to property ownership. Over 40 years, lawyer’s fees have moved from percentages to flat fees. Present fees for lawyers are about one third of what they were.
When it comes to real estate, the $50,000 house, 40 years which generated $2,500 in commissions, is now $1 million, and often produces $50,000 in real estate “fees”. If real estate commissions were still aligned with lawyer’s fees, then the present fee would be about $833 (one third of what it was 40 years ago), and if that was the case, I don’t think that anyone in the public would be complaining and we wouldn’t have over 103,000 registrants in Ontario.
Of course there are going to be changes. And, when it happens, it will happen very quickly. So, get ready!
Brian Madigan LL.B., Broker