America’s real estate industry is undergoing a radical transformation that could change how we buy and sell homes forever.
A jury in Missouri last month found the National Association of Realtors (NAR) had artificially raised commissions by enabling brokers to collude. That verdict could set a national precedent – and experts estimate it may slash Realtors’ commission by up to 30 percent.
Lower fees would be good news for home sellers and buyers, but what does the ruling mean for the NAR’s 1.6 million members? Among them are single moms, veterans and aspiring young professionals. One report estimates as many as 80 percent now stand to lose their jobs.
‘I feel like realtors are getting an unfair reputation from this,’ agent Desirae Wykoff, 36, told DailyMail.com. ‘I could see a lot of these people hanging up their license.’
In recent years, acquiring a real estate license has become a popular side hustle for Americans. In 2020 and 2021 – when the pandemic forced many out of work – a record 156,000 people became Realtors, according to the NAR.
Wykoff got her license in 2015 when her husband quit his job to start a new business, but it was slow to get off the ground.
When they divorced five years later she became a single mother-of-three. She worked full-time at a local car dealership in Tulsa, Oklahoma, and brokered real estate deals on the side to supplement her income – usually an extra $15,000 to $25,000 a year.
‘When you’re on the outside looking in at this profession, it looks like easy money. It looks like you do a little bit of work for a lot of money but that is not at all what it is,’ she told DailyMail.com.
When somebody sells a house the commission they pay is split between the buyer’s and seller’s agents. The Missouri jury ruled that agents were conspiring to keep commission artificially high and awarded home sellers in the state $1.78 billion in damages.
The presiding judge can now triple that damages verdict under antitrust law. The plaintiffs have also asked the judge to order changes to how the industry operates.
Similar class-action lawsuits are set to be heard in Illinois and South Carolina.
US real estate agents drive around 90 percent of home sales, according to a report from investment bank Keefe, Bruyette & Woods (KBW). Figures from the Labor Department suggest they earn on average $65,850 a year.
Agents in the US charge home sellers an average commission of between 5 and 6 percent of the sale price of their property – more than twice the average fees charged in the UK, for example.
That commission is paid entirely by the seller but in accordance with standards specified by the NAR it is split down the middle between the two brokers.
The NAR is the largest trade association in the US and only its fee-paying members are allowed to call themselves ‘Realtors’. They are also the only people with access to its proprietary database of properties available for sale.
Those databases are referred to as ‘multiple listing services’ or MLSs and require the seller’s agent to list the amount of commission their client is paying. That, in theory, enables the buyer’s agent to ‘steer’ buyers to houses on which the commission is higher and through which they can profit more in the event of a sale.
According to a survey by consulting firm 1000watt, more than 76 percent of 640 real estate agents in the US said buyer’s agents would be more likely to show a property if they knew the seller was paying higher commission.
This system, in turn, allows the seller’s agent to tell sellers that if they don’t offer up enough commission, buyers won’t ever see their house.
But many Realtors are bullishly defensive of the current system.
Drake Johnson, a veteran and Realtor based in North Carolina, said: ‘You always have the option not to hire a real estate agent.’
‘There’s nothing stopping sellers from putting a “for sale” sign in their yard and posting their house for “sale by owner” on Zillow,’ he added. ‘There are a ton of cheap options out there.’
He also noted that seller’s agents sometimes offer to list houses on the MLSs for a flat fee of just a few hundred dollars. But even in those cases, the buyer’s agent will still be paid as a percentage of the sale price.
Industry insiders have suggested buyer’s and seller’s agents should be ‘unbundled’, meaning they are paid for by the buyer and seller respectively. That also presents problems because first-time homebuyers may not be able to afford the fees.
Both Johnson and his wife make a living brokering residential real-estate trades. He pointed out that while Realtors earn fees, they also have expenses.
‘They have to pay their brokerage, they have to pay all this other stuff. And then, all of a sudden, that agent is working for less than minimum wage,’ he said.
‘Ninety percent of agents sell 10 percent of the houses and 10 percent sell a whole bunch.’
A spokesperson for the NAR said the association would appeal the verdict.
‘This matter is not close to being final as we will appeal the jury’s verdict. In the interim, we will ask the court to reduce the damages awarded by the jury,’ said spokesperson Wes Shaw.
‘We stand by the fact that NAR’s guidance for local MLS broker marketplaces ensures consumers get comprehensive, equitable, transparent and reliable home information.’
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
MONTREAL – The Quebec Professional Association of Real Estate Brokers says Montreal-area home sales rose 9.3 per cent in August compared with the same month last year, with levels slightly higher than the historical average for this time of year.
The association says home sales in the region totalled 2,991 for the month, up from 2,737 in August 2023.
The median price for all housing types was up year-over-year, led by a six per cent increase for the price of a plex at $763,000 last month.
The median price for a single-family home rose 5.2 per cent to $590,000 and the median price for a condominium rose 4.4 per cent to $407,100.
QPAREB market analysis director Charles Brant says the strength of the Montreal resale market contrasts with declines in many other Canadian cities struggling with higher levels of household debt, lower savings and diminishing purchasing power.
Active listings for August jumped 18 per cent compared with a year earlier to 17,200, while new listings rose 1.7 per cent to 4,840.
This report by The Canadian Press was first published Sept. 6, 2024.
In the quest to find cities where renters can enjoy the best of all worlds, a recent study analyzed 24 metrics across three key categories—Housing & Economy, Quality of Life, and Community. The study ranked the 100 largest cities in Canada to determine which ones offer the most to their renters.
Here are the top 10 cities that emerged as the best for renters in 2024:
St. John’s, NL
St. John’s, Newfoundland and Labrador, stand out as the top city for renters in Canada for 2024. Known for its vibrant cultural scene, stunning natural beauty, and welcoming community, St. John’s offers an exceptional quality of life. The city boasts affordable housing, a robust economy, and low unemployment rates, making it an attractive option for those seeking a balanced and enriching living experience. Its rich history, picturesque harbour, and dynamic arts scene further enhance its appeal, ensuring that renters can enjoy both comfort and excitement in this charming coastal city.
Sherbrooke, QC
Sherbrooke, Quebec, emerges as a leading city for renters in Canada for 2024, offering a blend of affordability and quality of life. Nestled in the heart of the Eastern Townships, Sherbrooke is known for its picturesque landscapes, vibrant cultural scene, and strong community spirit. The city provides affordable rental options, low living costs, and a thriving local economy, making it an ideal destination for those seeking both comfort and economic stability. With its rich history, numerous parks, and dynamic arts and education sectors, Sherbrooke presents an inviting environment for renters looking for a well-rounded lifestyle.
Québec City, QC
Québec City, the capital of Quebec, stands out as a premier destination for renters in Canada for 2024. Known for its rich history, stunning architecture, and vibrant cultural heritage, this city offers an exceptional quality of life. Renters benefit from affordable housing, excellent public services, and a robust economy. The city’s charming streets, historic sites, and diverse culinary scene provide a unique living experience. With top-notch education institutions, numerous parks, and a strong sense of community, Québec City is an ideal choice for those seeking a dynamic and fulfilling lifestyle.
Trois-Rivières, QC
Trois-Rivières, nestled between Montreal and Quebec City, emerges as a top choice for renters in Canada. This historic city, known for its picturesque riverside views and rich cultural scene, offers an appealing blend of affordability and quality of life. Renters in Trois-Rivières enjoy reasonable housing costs, a low unemployment rate, and a vibrant community atmosphere. The city’s well-preserved historic sites, bustling arts community, and excellent educational institutions make it an attractive destination for those seeking a balanced and enriching lifestyle.
Saguenay, QC
Saguenay, located in the stunning Saguenay–Lac-Saint-Jean region of Quebec, is a prime destination for renters seeking affordable living amidst breathtaking natural beauty. Known for its picturesque fjords and vibrant cultural scene, Saguenay offers residents a high quality of life with lower housing costs compared to major urban centers. The city boasts a strong sense of community, excellent recreational opportunities, and a growing economy. For those looking to combine affordability with a rich cultural and natural environment, Saguenay stands out as an ideal choice.
Granby, QC
Granby, nestled in the heart of Quebec’s Eastern Townships, offers renters a delightful blend of small-town charm and ample opportunities. Known for its beautiful parks, vibrant cultural scene, and family-friendly environment, Granby provides an exceptional quality of life. The city’s affordable housing market and strong sense of community make it an attractive option for those seeking a peaceful yet dynamic place to live. With its renowned zoo, bustling downtown, and numerous outdoor activities, Granby is a hidden gem that caters to a diverse range of lifestyles.
Fredericton, NB
Fredericton, the capital city of New Brunswick, offers renters a harmonious blend of historical charm and modern amenities. Known for its vibrant arts scene, beautiful riverfront, and welcoming community, Fredericton provides an excellent quality of life. The city boasts affordable housing options, scenic parks, and a strong educational presence with institutions like the University of New Brunswick. Its rich cultural heritage, coupled with a thriving local economy, makes Fredericton an attractive destination for those seeking a balanced and fulfilling lifestyle.
Saint John, NB
Saint John, New Brunswick’s largest city, is a coastal gem known for its stunning waterfront and rich heritage. Nestled on the Bay of Fundy, it offers renters an affordable cost of living with a unique blend of historic architecture and modern conveniences. The city’s vibrant uptown area is bustling with shops, restaurants, and cultural attractions, while its scenic parks and outdoor spaces provide ample opportunities for recreation. Saint John’s strong sense of community and economic growth make it an inviting place for those looking to enjoy both urban and natural beauty.
Saint-Hyacinthe, QC
Saint-Hyacinthe, located in the Montérégie region of Quebec, is a vibrant city known for its strong agricultural roots and innovative spirit. Often referred to as the “Agricultural Technopolis,” it is home to numerous research centers and educational institutions. Renters in Saint-Hyacinthe benefit from a high quality of life with access to excellent local amenities, including parks, cultural events, and a thriving local food scene. The city’s affordable housing and close-knit community atmosphere make it an attractive option for those seeking a balanced and enriching lifestyle.
Lévis, QC
Lévis, located on the southern shore of the St. Lawrence River across from Quebec City, offers a unique blend of historical charm and modern conveniences. Known for its picturesque views and well-preserved heritage sites, Lévis is a city where history meets contemporary living. Residents enjoy a high quality of life with excellent public services, green spaces, and cultural activities. The city’s affordable housing options and strong sense of community make it a desirable place for renters looking for both tranquility and easy access to urban amenities.
This category looked at factors such as average rent, housing costs, rental availability, and unemployment rates. Québec stood out with 10 cities ranking at the top, demonstrating strong economic stability and affordable housing options, which are critical for renters looking for cost-effective living conditions.
Québec again led the pack in this category, with five cities in the top 10. Ontario followed closely with three cities. British Columbia excelled in walkability, with four cities achieving the highest walk scores, while Caledon topped the list for its extensive green spaces. These factors contribute significantly to the overall quality of life, making these cities attractive for renters.
Victoria, BC, emerged as the leader in this category due to its rich array of restaurants, museums, and educational institutions, offering a vibrant community life. St. John’s, NL, and Vancouver, BC, also ranked highly. Québec City, QC, and Lévis, QC, scored the highest in life satisfaction, reflecting a strong sense of community and well-being. Additionally, Saskatoon, SK, and Oshawa, ON, were noted for having residents with lower stress levels.
For a comprehensive view of the rankings and detailed interactive visuals, you can visit the full study by Point2Homes.
While no city can provide a perfect living experience for every renter, the cities highlighted in this study come remarkably close by excelling in key areas such as housing affordability, quality of life, and community engagement. These findings offer valuable insights for renters seeking the best places to live in Canada in 2024.
