The real estate industry is a funny business, which includes your local Guelph real estate agent. Unfortunately not funny in a stand-up way, although there can be plenty of that with how we see people’s homes on a daily basis. No, I’m talking about how as an industry we can often do things to shoot ourselves in the foot and then cry about the injustice of the injury.
The real estate industry is competitive – I mean highly competitive. There are currently over 700 agents, licensed and members of the Guelph and District Association of Realtors. There are another 1,500 in Kitchener-Waterloo and another 500 or so in Cambridge. Throw in the giant Toronto real estate board and its 50,000 plus members and you have a lot of people chasing your listing and purchase.
Our industry has been built on a co-op model that is based upon sharing a lot of information and cooperating with competitors to bring buyer and seller to the table, negotiate a deal and, at the end of the process, a reasonably happy exchange of properties.
We get paid well to do this. Part of that payment is that we take on all kinds of risk. There is no pension, no safety net of unemployment insurance, no salary – just straight pay for results.
Benefits of MLS for Guelph homes for sale
The cooperation part comes in that I may not have ready buyers in my client list to match my listings. That’s where the Multiple Listing Service (MLS®) comes into play.
We post your home on the local MLS® system and we are rule-bound to cooperate with all other members or our association. Without this cooperative system of sharing listings and buyers, the efficiency of the real estate market would be severely impacted. In fact, there probably wouldn’t be a market.
With internet and the consolidation of MLS databases, I can see what properties are listed for sale. But also the sales data for most of the province – without having to have multiple memberships. That’s generally been good news. We can offer more services and cover more territory for our clients.
Out of town agents
It also means that others have that mobility as well. In 2017, our local market was a massive influx of agents from the GTA bringing their clients to our area to buy homes- and it continued into 2020. Our sellers loved it because it meant a huge lift in our market.
One of the “disruptions” was that some of these outside agents (in fairness, not all were from the GTA) would send clients to open houses on their own. Even contact listing agents for appointments to view homes.
When they found a suitable house, the client would call their agent and they would write up the deal and represent them.
There is nothing wrong with this.
This practice understandably upset some Realtors who felt used and misled. They showed the house, only to have that buyer show up with some other agent to represent them.
Compounding the problem is that so much information is publicly available. Many buyers like to research and check out available homes on their own. At the time, they may not have a Realtor. They too often call the listing agent looking for an appointment to view a listing. But there is absolutely nothing wrong with this practice.
Here is where the issue starts to surface.
Agents with the listing feel like they are being taken advantage of. As a result, they try to penalize the sales reps that bring the offers by clawing back a big chunk of the commission for the selling side.
The sellers who signed the listing agreement (which outlines how the commission is split up) are unaware of the clawback. As a result, they certainly don’t see that being refunded back to them.
I have no sympathy for the listing agents that are trying to do this. This makes the industry look bad and violates the code of ethics we follow.
When we take a listing, we are taking on a legally binding contract to represent a seller and expose their property to as many potential buyers as possible.
In my world, this means even those buyers that choose not to declare if they are working with another agent or haven’t even decided at this point. The legislation and the code of ethics is absolutely clear on this. I have an obligation to bring all qualified buyers through my client’s home.
In a perfect world this wouldn’t be an issue, but we all know that when there’s money involved people will do strange things.
At Home Group Realty, one of our core values is transparency. We will not penalize any buyers or buyer sales representatives when they bring offers in on our listings.
This “problem” of non-represented buyers is not an issue as some brokerages think it is. We will always cooperate fully with any potential buyers or agents in order to fulfil our fiduciary obligations.
Our industry needs to have full disclosure and more open conversations with our clients and competitors. Otherwise the cooperative foundation of this industry will be damaged and hurt everyone in the process.