James – I applaud your efforts at introducing a low fee business model, however the article is quite clear that the issue is with buyer’s agents pushing their clients toward housing that maximizes the agent’s benefit, at the cost (and potentially to the detriment) of their client. This is a clear breach of the (Ontario) REBBA Code of Ethics provisions, as well as a breach of fiduciary duty (in my opinion). They are simply not working in their client’s interest (i.e. not looking at all sources for the most suitable accommodation, for the best possible price). Hence my comments that commission-based (and particularly split-commission) compensation needs to be forbidden as a primary means of payment.

Under a fee-for-service structure, if I were a buyer and I hired you as my agent, I would pay you for every hour you worked (but of course, you would need to justify what you are doing / accomplishing for those hours, and also demonstrate value + accountability for said services), and I could further offer you a bonus structure, where say for every $10k you get the price below asking, I pay you a $500 – $1k bonus (but that’s for me, the client, to offer voluntarily – not for an agent or brokerage to demand – let’s be clear about this). Under this system, you would be working very hard for my interests — looking at all sources of places for sale (i.e. MLS, private, FSBO, auctions, etc.) that meet my requirements, and also work very hard to get the price as low as possible — because now it works in your interest as well. The current system simply doesn’t allow that (and nor would OREA ever consider it — means less money for them & their members).

You would be SHOCKED at how many sellers and buyers disregard the service because they feel we are cheap. I think the issue is the public does not understand how much agents really are being paid and associate total commission with value.

Completely agree with the comments from Dennis K. Commission based service should.be prohibited.

The real estate industry is one of the most corrupt in the world. It doesn’t take much to see that they are the ones manufacturing the situations that are happening. These situations are affecting both buyers and sellers negatively and could potentially lead to a major economic crash. I love Canada and its a great place overall but I have noticed that there is alot of passive corruption because people don’t like to formalize rules around things. Terms like “trust” and “building relationships” are used in place of rules so that there is room to operate without recourse. I see it both at my work place (a major bank), the government and real estate. Everyone knows the real estate agency is corrupt and not one bit of enforcement is being done. Occasionally they punish one person for show. Your ideas are good. But they will NEVER be implemented.

Some Co-operating agents have not shown their clients any listings/properties that did not pay the standard 2.5% commission.

Also some buyers agents push their clients into pre-construction projects that pay them 5-6% commission.

I expected more change to happen in this industry years ago with technology. Using video walk through and the like and am simply astonished at the amounts of commissions sellers pay.

That said, it’s not a big deal to pay a realtor 50k for a few days work when the value of your property continues to skyrocket. A downturn or stagnated growth in real estate might change people’s minds and allow them to consider better negotiation with a realtor or find other available solutions.