Change is good, isn't it?

With recent articles in the Financial Post and Toronto Star regarding the current fight between the Canadian Real Estate Association and the competition bureau, I'm thinking change is coming to the Real Estate industry. Finally!

Let me be clear. I believe there are many good, well qualified, hardworking Realtors out there. I just wonder if what they believe is the function of their job and what consumers believe, is the same thing. I mean let's look back.

Twenty years ago you as a consumer, would go out with a Realtor to look at homes and would rely heavily on your Realtors experience and knowledge of the Real Estate Market to help make your decision on the home that you would buy. That would include but not be limited to neighbourhood, price and possibly style. What you might not have understood back then is that your Realtor didn't work for you. That Realtor worked for the Sellor and therefore their job was to sell that home regardless of what your needs were.

Well times have changed and now we have Buyer Agency. This means that the Realtor now works for you! Or does it?

The Realtor is still paid by the Sellor and many Selling Agents will be quick to point this out to the Buying Agent. In fact, if you look at Real Estate teams you have to ask yourself. Is it not the job of the Buying agents on that team to facillitate the sale or the properties listed by the team?

That's why I believe change is important in our industry. If we truly believe that we bring something special to the table as Realtors then why would we be concerned with For Sale By Owners and Discount Brokerages having full access to the MLS? Doesn't this give us a chance to showcase our talent? Prove our worth? Won't we net the Sellor way more than they could net for themselves? I mean we only need to cover the $25,000 or so they're paying us right?

There is a longstanding joke in the Realtor community that goes a little like... "We haven't had a raise in 40 years." In truth, as Real Estate prices have gone up over the last 5-10 years, so have the commissions earned by Realtors. In a recent Financial Post article by Garry Marr he said:

"There is good reason for realtors to resist wholesale changes to their business. Last year, the industry did almost $150-billion in existing homes sales. At a 5% commission rate - the average in Canada - consumers forked out almost $7.5-billion in commissions. In the hot real estate market of 2007, when there was $160-billion in buying activity, realtors would have earned a total of $8-billion in commission (based on the 5% rule)."

With that much money at stake I imagine many new players will enter the market and with Social networking sites like Facebook and Twitter and other sites like Craigslist, Kijiji and Ebay, how long is it until more and more people take on the job of selling their home themselves? As I mentioned in a past blog, www.grapevine.ca is successfully marketing itself to For Sale By Owners, to the point of a true competitor of the MLS in Ottawa and is expanding itself to other markets in the area.

So let me ask a question. As a consumer, if I could fix my own car and save $500 I would. If I could successfully represent myself in a court of law and save potentially tens of thousands of dollars, I would. So if I can sell my own house and put the extra $20,000 in my pocket, why wouldn't I at least try it?

Competition may force us to lower our commissions or increase our value added services. Maybe it just gets rid of the highly producing agents who sell 50 or more homes a year. It will be a lot harder for them to justify $25,000 in commissions for listing a home on the MLS and waiting for a Buyer Agent to sell it.

In this epic battle between The Real Estate Community and The Competition Bureau, let's hope the winner is the consumer.