“There is a lack of information and a lack of transparency in this industry that simply does not exist in any other industry,” says Bill McMullin, an industry dissident who owns Halifax-based ViewPoint Realty. “The real estate industry may be uncomfortable with this, but once you automate a lot of that data, you circumvent the need for a realtor. Things are changing, and they are changing quickly.”
This is by design, and it's not confined solely to the real estate industry. The lack of transparency in the banking industry is a prime example. The amount of pilfering still ongoing in our neighbour to the south is a good example of why obfuscation leads to a corrupt business model.
A bigger step would be to allow homeowners to list their homes on MLS for a small fee, then negotiate the sale of their homes without the help of an agent. As the process becomes commodified, consumers stand to benefit in lower transaction costs.
This makes perfect sense. The consumer should have the option to pay a fixed cost for a service as opposed to a ridiculous percentage commission. Does a realtor really do 10x the work to sell a $1.5M dollar home than a $150K home? While on the topic of compensation: what incentive does a buyer agent have to reduce the cost for the buyer, as they're compensated on the selling price! Direct conflict of interest?!? Buyer agent's compensation should be tied to the amount saved on the cost of the purchase, not the selling price. Utterly ridiculous.
The real estate industry's lock on information is one reason why the process of buying and selling a home in Canada has changed little since online real estate listings began in 1996, even as other customer-service-intensive industries such as travel and tourism have seen radical technological transformations. An estimated 90 per cent of all home sales in Canada are still done in the traditional manner.
Astounding, that in today's age, with the technology advances of the 00's we're stuck with this. Clearly the CREA have seen this coming and have been fighting tooth and nail for years.
And the CREA's justication for the current system?
With a great database comes great responsibility, he says. An advantage of the traditional system is that anyone using MLS has an agent to help them through what can be a confusing process.
Seriously, the CREA thinks their freaking Spiderman? I wonder WHY the process is "confusing"? Maybe it's because nobody but the CREA has access to any of the relevant information in the first place!
Realtor: "Pay me lots of money because this is complicated."
Buyer/Seller: "Could you explain it to me?"
Realtor: "No! I can't charge you lots of money if you actually know what I do."
Buyer/Seller: "Well that doesn't seem right, I think I'll see if someone else can explain this to me."
Realtor: "Haha, loser, only Realtors know this info, and we won't give it to peons like you, so suck it up and pay us."
Buyer/Seller: "Fuck me."
Hopefully, things WILL change at some point. Somehow with the introduction of the HST on home prices, rising interest rates, and the eventual collapse of the housing bubble in Canada (that's another rant), I can see sellers getting squeezed. Are they going to continue to pay exorbinant realtor costs especially if they are close to a negative equity situation? I'm guessing "No".