Robert Price: Regulations need to protect consumers, not real estate agents

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Opinion: Two issues the real estate industry needs to address — transparency of how fees are collected, and the misalignment of incentives for agents.

Unfortunately, the situation the Armstrong family find themselves in is a blatant example of the inflated and hidden fees real estate agents charge in B.C. and elsewhere in Canada. It’s also a reflection of an industry that is clinging to outdated regulations that protect agents instead of their clients.

The current percentage-based commission structure incentivizes buyer agents to only show homes with a high pricetag and encourages buyers to bid higher. And yet, most consumers are under the impression hiring a buy agent is free. A good start would be adjusting regulations so that buyers pay buy agents directly for their understood services and let market forces and competition dictate the rates offered to buyers.

These apps and platforms provide more transparency, more data and easy online tools to facilitate the transaction. A significant and growing number of Canadians are ready, willing and able to fully control their home transaction experience, without an agent, while saving money in the process.Article contentTwo competing offers on a $1-million listed property with five per cent paid in commissions, 2.5 per cent to the buy agent and 2.5 per cent to the sell agent.

Which offer is better for the buyer? Both offers represent the same net proceeds to the seller, while the buyer presenting Offer B saves $25,000.

 

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This article raises really good points. Some of the real estate process is indeed a racket among people who otherwise wouldn't be able to get a job at a used car dealership.

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