À qui la chance?

Today, the Canadian Press reported this story about Proprio Direct.

A little Coles’ Notes version of the case: once upon a time, Proprio Direct, a real estate brokerage, employing real estate agents, would sell consumers their real estate services, including a non-refundable “membership” fee of about $1500, charged upfront, or a commission-based payment scheme with an agent. The flat fee option listed your house on the MLS and a yard sign, with the understanding that the consumer took it upon themselves to qualify buyers, advertise, and generally sell the home themselves. Sounds like a deal, right? Sounds a lot like what other for-sale-by-owner websites sell. But it’s actually how Proprio Direct landed themselves into trouble in the first place. Why? Because they are a real estate brokerage. Under the Brokerage Act, brokerages aren’t allowed to collect a penny from a seller unless the property actually sells. If it doesn’t sell- no commission, be it a percentage of the final sale price, a set amount, or a membership fee.

Some Proprio Direct clients bought their services, didn’t sell their home, and expected a refund of their membership fee. Proprio Direct didn’t oblige, and long story short, got taken to court over it. (For the record, they haven’t charged a membership fee since 2002.) Battling it out as a point of anti-competitive behaviour within the real estate industry, they argued that consumers should have a choice between commissions, flat rates, and anything else. Fair enough, and a valid argument indeed. Problem with their argument is that consumers already do have a choice.

As a consumer, you have a choice to agree to hire an agent, and to that real estate agent’s fees or not.  Hiring an agent is a matter of personal preference- you either do, or you don’t, and both have their pros and cons. Nobody works for free, and a good agent will work hard to ensure a quick sale of your home. Interview several real estate agents before choosing one. Make sure you feel comfortable with them, not intimidated by them, and trust your gut on this one.  You should feel like someone is on your side, not like you’re being strong-armed into a sale. If you feel like your agent can’t be trusted, you won’t have a pleasant experience in selling your home, and nobody likes to pay someone they can’t stand. Ask whether they are flexible in their payment options. Ask what type of marketing plan they have in mind for your property. If you hire an agent, expect status updates, good photography of your property, and a set marketing plan, with quantifiable milestones to be met. For example, if an agent promises to advertise your home in the local newspaper, demand proof of it.

At the end of the day, a real estate agent works for you, and ought to actually earn his commission.

If you’re interested in learning about how we earn ours, drop us a line at info@mar-vo.com or check out www.immolaval.com.

Sources: The Gazette, Les Affaires, the Supreme Court of Canada