Editor’s note: This month, Inman News is focusing coverage on the issue of percentage-based real estate commissions and other industry compensation practices. The following guest perspective is written by Don MacKay, a real estate broker in Canada. Please join in the discussion: Click here to share your views and insight with Inman News readers.
By DON MACKAY
One of the problems that we in the industry suffer from is that the vast majority of home sellers are satisfied with the current commission model.
I offered a fee-for-service model that would save home sellers thousands — tens of thousands of dollars in many cases — on the sale of their home. In 23 years of offering, basically to work by the hour on a retainer or pay 7 percent at time of sale, not one seller opted for the fee-for-service offer.
It’s not the amount of commission — it’s the lack of negotiation skills and knowledge of the "real" real estate market by the "I’ve got a killer application for people to buy property online" crowd that’s the issue.
The North American real estate industry governance models are so top-heavy with bureaucracy — that requires more and more dues-payers to pay for their perks and honorariums — that they pay lip-service to the real needs of the industry.
Like all politicians, as soon as they get elected they become part of the pork barrel and forget about their constituents.
The biggest need at the moment is a national multiple listing service owned by the licensees, with all info on all listings available to any person with access to a computer terminal.
Every agent could belong to this MLS for a very small monthly fee. Limited advertising would pay for the total cost of building and maintenance over time.
The second-biggest need is public discipline. Until the industry-governing authorities are willing to have public discipline for licensees, where members of the public at large sit on hearing panels/juries that decide the fate of offenders — and the cancellation of licenses actually takes place on a regular basis and all hearings are published in the local newspapers and on the Web — the offenders will pay the cost of the hearing and use their one or two weeks of suspension for vacations.
Don MacKay is managing broker for Amex Broadway West Realty in Vancouver, Canada.
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