Viewer questions on real estate agents fees

Ron Butler, mortgage broker at Butler Mortgage, Bob Dugan, chief economist at Canada Mortgage and Housing Corporation, Lauren Haw, broker of record and industry relations officer at Zoocasa, join BNN Bloomberg to discuss real estate.
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[@TheDonjuan15]

The real estate commission structure is one of the dumbest structures I've ever come across. It should be a FIXED FEE. There is no real "skill" offered by the real estate agent that deserves $20-30K payments. It's an idiotic compensation structure that should be the same as paying a lawyer for closing the property.

[@naveedkanji1]

They offer a service and if that service is one you can do without and sell yourself. If you choose to go with them then there's a price. You can't have it both ways. There's significant risk in that field that is borne only by the agent as the seller could walk away after a predefined time after the agent has spent his/her time in doing staging and advertising etc and has paid out of pocket. Same can be the case for buyer agents who will show numerous houses to their clients and maybe not even get a sale.

[@TheDonjuan15]

@@naveedkanji1 Then charge per hour. Does it make sense they should be compensated $20-30K per transaction for taking on a risk of a few thousand dollars for advertising costs?

[@Dylan.Whitnack.Realtor]

​@@TheDonjuan15 How do you see charging per hour working in real estate? Like a Lawyer? Where whenever they pick up the phone, or type something up, or spend any time working on your file they bill you? I don't think that would work in real estate.

[@naveedkanji1]

@@TheDonjuan15typical commission for a seller agent is 2-2.5%. so unless they are selling million dollar homes they aren't making 20-25k. Most make 5-10k per house. To get a 100k salary they have to sell 10-20 homes minimum which may sound easy but it's not. Secondly, staging costs alot. Marketing costs alot. Risk of house not selling and you walking away is high in this market. Not to mention this is all contingency fee. If there's ever a flat fee established then be ready to pay upfront. No one does work for free.

[@elai3147]

it's fair, since many agents complete one deal or less each year

[@stephenr6194]

5% interest is too high?

[@quixomega]

No, real estate prices are artificially high because of years 0% inflation-adjusted interest rates. It's going to take a big correction to adjust.

[@tammykrasnova8936]

The problem with selling without a real estate agent/not offering commission to the buyer's agent is that most agents will discourage them from even seeing your property. If you decide to sell without an agent (which is totally doable, you need a good lawyer and photographer), you should still offer a commission to the buyer's agent. If you buy you should use an agent, unless you want to fork out for every single offer made

[@nicolasbenson009]

I’m a new dad, I moved to the Bay Area a few years ago and I’m thinking of purchasing a single family home, but with real estate prices currently through the roof, is it still a good idea to buy a home or should I invest in stocks for now and just wait for a housing market correction? I heard Nvidia and AMD are strong buys.

[@BridgetMiller-]

it’s a personal decision, but according to Forbes, housing activities will remain stagnant for the most part of the year, so maybe hold off a little.

[@ScottKindle-bk3hx]

well you could put a downpayment on a home and as well diversify as much as you can into Ai and pharm. stocks like Pfizer and JnJ.

[@PaulKatrina.]

Certain Ai companies are rumoured to be overvalued and might cause a market correction, I’d suggest you go with a managed portfolio, but even those don’t perform so well, so it’s best you reach out to a proper fiduciary to guide you, that’s what works for my spouse and I.

[@Hectorkante]

this is all new to me, where do I find a fiduciary, can you recommend any?

[@PaulKatrina.]

Well, there are a few out there who know what they are doing. I tried a few in the past years, but I’ve been with Melissa Terri Swayne for the last five years or so, and her returns have been pretty much amazing.

[@KirkPounder]

Wow this guy from the cmhc is clueless

[@prao4603]

He's a propagandist whose job is to spin and pretend a problem doesnt exist - CMHC is doing that itself because they are screwed when the housing bubble pops.