Well, I will go here again. A few years ago, we had the Competition Bureau talk about our anti-competitive behavior. Their point at the time was to allow outsiders to enter our MLS system, and many other things, including fees. I encountered it when teaching a BCREA application practice course for a new British Columbia licensee At the end of the day there was a bit of 10 minutes about anti-competitive behavior and the government used secret investigators There was one video I pointed out Check us out.
Fast forward to October 2021 last week and you’ll see that the media worked for the station in a sting operation. CBC market.. This is a piece of steering / commission on the FSBO’s unfair competitive arena that challenges commissions, primarily based on licensees who “steer” clients from FSBO. (Don’t just start posting outside the area.)
Not all news is bad, as there is a very simple solution. At least what I present here is better than more scrutiny from the bureau. This is not true for everyone, but it does help avoid anti-competitive behavior that the agency opposes. After this news article, it could come to us again.
Return to your early career when looking for formal sales training outside the board or association’s mandatory courses. We’re talking about Floyd Wickman, Mark and Chris’s leader, Dwayne Groom and more. They all taught us to hold a “buyer counseling session” before we show our property to suspects / prospects. By doing so, you can (hopefully) make becoming a client “genuine” and set up a fair competition with everyone knowing all the rules.
Here in BC, like many other jurisdictions, there is a buyer agency exclusive contract. These contracts generate loyalty and define a timeline of contracts with clients and expected commissions set in dollar values (rather than percentages). There are two negative options for consumers. The client must not use the services of another licensee in the geographic area of the purchase desired and the purchaser must pay us a fee.
In the BC Agreement, Clause 6A states: “The buyer pays the buyer broker a fee of ________.” This is where we all fill in the dollar amount, knowing what the compensation requirements are because we all made the business plan.
The problem is that many licensees I see every day in my instructor role don’t use business plans. Some consider the industry to be the place to print money, but many can’t justify or value their fees, showing why they deserve them.
Under 6A, I add these words to the blank: “$ 12,000 paid by the seller and the listed broker (or the property and the amount that suits my needs)”.
Then move on to Clause 6B, which explains how I will be paid. This is usually done through sellers and listed brokers as added in 6A.
Now let’s look at Clause 6C. It states: The buyer shall pay the shortfall mediated by the buyer. It’s pretty clear here. That is, whether it is properly or completely explained.
I say any shortage will be covered by the buyer. I’m telling you where my salary goes – X% to a brokerage firm, 25% of income tax, GST costs, money reinvested in a business, and my spouse and I household expenses Amount used to run (car, house), insurance, vacation).
I also state what my business costs are in a general way and make sure they understand that this business is harsh on the benefits of health and welfare. There is no EI or pension plan, and the E & O deduction is $ 2,000 per incident, with an additional $ 2,000 added to the broker portion. Please read and refer to the contractor’s contract. I have no discussion and people are willing to pay me.
Let’s do the truth here, which other industry waits 30 to 120 days or more to get paid after the trading company? Not many. We need to manage our business and contracts help it.
Now I’m discussing the discount fees you might come across. Tell the buyer that they are expected to make up for the shortfall. I let them know which housing they offer on consignment and let the buyer decide what they want to see. Also, you rarely see many discount fee structures and they don’t have to worry about it. When we reach it, we cross the bridge. This eliminates the need to keep them away from what could be a perfectly good purchase for the buyer. Isn’t that what we’re doing here, are you working for our clients?
Here’s the point: let the buyer, not you, decide if they want to see the properties listed at a discounted fee, or if they make up for the shortfall. Get ready to justify your income. Let them avoid those traits, not you. Consumers have the right not to see them, based on their needs and their ability to address your service contract. Know it before you get into a relationship.
Yes, you may lose or refer a client based on the contract you have entered into. That’s the risk and the business model of defending. In 25 years, I received one discount fee. Not bad statistics. The discount brokers I work for are only a small part of the market, so they are not very common. To you, it may be different, and you have to show creative and better value.
In some jurisdictions, there is the ability to negotiate better fees with listed brokers and sellers in other ways, such as fee contracts. It’s not easy and can be controversial, so it’s up to your board or association to decide how to do it.
This idea isn’t a panacea, and I think there’s a better idea of how to handle the steering, but it’s easy and stares at our face.
No wonder Insights West Poll Since 2017, only about 50% of Canadians say they have a positive view of realtors that they are ethical, credible, or transparent. I have been involved in professional behavior and ethics for over 15 years and have seen it. We have a lot to do and every time there is a negative media story, we always seem to get worse. No client was asked if I was a member of the Medallion Club. They care little. It is the space between our ears, not the ears of the general public. Clients simply want their needs to be met.
The point: We are in the media world and cameras are everywhere. Know your role, learn agencies, become a good communicator and always work within your area of expertise. Know both inside and outside of all documents that the client uses / signs or agrees to. You can accurately summarize what these contracts mean to your clients: good, bad, and ugly. Understand what you need to live for income, show your value / expense (in a general way), and work for it. There are few easy shortcuts to ethical real estate.
We also need to be good educators of the general public, one client at a time, with every change in new rules and professional practices. It’s up to us. Otherwise, you can spend a lot of cash to protect yourself from a very unfriendly government. Good luck and put the stick on the ice.
Committee: Pave the way for trouble | Rem
https://www.realestatemagazine.ca/commissions-steering-our-way-into-trouble/ Committee: Pave the way for trouble | Rem