A substantial settlement recently announced by a U.S. group representing more than one million Realtors has real estate experts hopeful Canadian home sellers could soon get a better deal.
Last week, the U.S.-based National Association of Realtors (NAR) agreed to pay $418 million US to end legal claims from home sellers that argued the group artificially inflated real estate commissions.
The NAR, which denied any wrongdoing in the case, has also agreed to eliminate the standard six per cent sales commission and do away with other commission rules.
The landmark settlement in the U.S. is playing out at the same time as a proposed national class action lawsuit makes its way through Canadian courts, with the lawyer behind the claim saying a win would reduce the cost of Canadian homes.
A University of British Columbia real estate professor says the settlement bolsters the argument for similar changes to happen in Canada, which could make it cheaper for people to buy and sell homes.
WATCH | B.C. real estate agents paying attention to U.S. settlement:
Why B.C. real estate agents are paying attention to a U.S. settlement on Realtor commissions
5 hours ago
Duration 2:14
A landmark settlement in the U.S. is garnering the attention of B.C. real estate experts. A U.S. group representing more than one million Realtors agreed to pay more than $400 million US to end legal claims that it artificially inflated real estate commissions. And it agreed to a change that could mean cost savings for home sellers. As Yasmine Ghania reports, a similar lawsuit is playing out in Canadian courts.
“It’s going to revolutionize the practice of real estate,” said Tom Davidoff, an associate professor at UBC’s Sauder School of Business and the director of UBC’s Centre for Urban Economics and Real Estate.
“It may become more competitive, but more importantly, cheaper for people to sell their homes.”
While they would not be a solution to the affordable housing crisis, Davidoff said, changes to commission rules would be a win for those looking to buy a home because prices would fall if sellers have lower costs.
Tom Davidoff, an associate professor at UBC’s Sauder School of Business, says the National Association of Realtors settlement could be revolutionary. (Mike Zimmer/CBC)
The U.S. case
For decades, the NAR has required brokers listing homes for sale to make a commission offer to a buyer’s agent up front — typically about six per cent of the sale price, split between a seller’s broker and a buyer’s agent.
Lawsuits argued home sellers were compelled to enter into commission-sharing arrangements in order to market their homes on multiple listing services (MLS) and not lose out on potential buyers.
As part of the settlement, the NAR has agreed to stop that practice, and to prohibit agents’ compensation from being included on listing portals.
In Canada, commission structures vary across the country, but typically real estate agents and their brokerage charge a percentage-based commission on the sale price of a home, split between the seller’s and buyer’s agents.
In B.C., it’s seven per cent on the first $100,000 and three per cent on the balance in a real estate transaction, according to real estate agents who spoke to CBC News.
Lawsuit alleges conspiracy
The Canadian Real Estate Association (CREA) is a defendant along with dozens of local brokerages in a proposed class-action lawsuit, filed in January of this year, which alleges “a conspiracy, agreement or arrangement” between brokerages leading to illegal increases in the price of residential real estate commissions.
The lawsuit filed in Federal Court has yet to be certified as a class proceeding.
“In a universe in which housing prices have grown astronomically … and the buyer brokerage is being paid based on a commission, are they doing any more work today than they did 15 years ago? The answer is probably not,” said Garth Myers, a partner at Kalloghlian Myers LLP, the firm that has filed the lawsuit.
The CREA represents more than 160,000 brokers, agents and salespeople through over 65 boards and associations in the country.
WATCH | Realtor says changes to commission rules could be ‘challenging’ for agents:
Commission changes could make business harder for Realtors, B.C. real estate agent says
1 day ago
Duration 0:52
Tamara Stone, co-founder of the Kelowna-based, ReMax-affiliated Stone Sisters, says changes to commission rules similar to ones recently agreed to by the National Association of Realtors in the U.S. could increase competition among real estate agents in Canada.
None of the allegations have been proven in court. The CREA has said it considers the allegations “to be without merit and will continue to vigorously defend against them.” It also says it’s “closely monitoring” the settlement agreement in the U.S.
Myers says he’s hopeful the U.S. developments strengthen the Canadian case.
“[The U.S. settlement] puts a major dent in any argument that the Canadian Real Estate Association is going to make with respect to the necessity of these [commission] rules for the proper functioning of the system,” he said.
“We think that the consequence of our lawsuit will mean more money in the pocket of home sellers and it’ll reduce the cost of residential real estate across the country.”
Lawyer Garth Myers says if successful, the Canadian class action lawsuit could mean more money in the pocket of of home sellers. (Maggie MacPherson/CBC)
Tamara Stone, a real estate agent and co-founder of ReMax Kelowna Stone Sisters, says that if Canadian commission rules are changed similarly to the U.S., it could lead to more competition among agents. ReMax is named as a defendant in the Canadian lawsuit.
“If [a Realtor] isn’t really showing value … negotiating and marketing for a seller and negotiating and working hard for a buyer, I think that will bring fees down,” Stone said.
HALIFAX – A village of tiny homes is set to open next month in a Halifax suburb, the latest project by the provincial government to address homelessness.
Located in Lower Sackville, N.S., the tiny home community will house up to 34 people when the first 26 units open Nov. 4.
Another 35 people are scheduled to move in when construction on another 29 units should be complete in December, under a partnership between the province, the Halifax Regional Municipality, United Way Halifax, The Shaw Group and Dexter Construction.
The province invested $9.4 million to build the village and will contribute $935,000 annually for operating costs.
Residents have been chosen from a list of people experiencing homelessness maintained by the Affordable Housing Association of Nova Scotia.
They will pay rent that is tied to their income for a unit that is fully furnished with a private bathroom, shower and a kitchen equipped with a cooktop, small fridge and microwave.
The Atlantic Community Shelters Society will also provide support to residents, ranging from counselling and mental health supports to employment and educational services.
This report by The Canadian Press was first published Oct. 24, 2024.
Housing affordability is a key issue in the provincial election campaign in British Columbia, particularly in major centres.
Here are some statistics about housing in B.C. from the Canada Mortgage and Housing Corporation’s 2024 Rental Market Report, issued in January, and the B.C. Real Estate Association’s August 2024 report.
Average residential home price in B.C.: $938,500
Average price in greater Vancouver (2024 year to date): $1,304,438
Average price in greater Victoria (2024 year to date): $979,103
Average price in the Okanagan (2024 year to date): $748,015
Average two-bedroom purpose-built rental in Vancouver: $2,181
Average two-bedroom purpose-built rental in Victoria: $1,839
Average two-bedroom purpose-built rental in Canada: $1,359
Rental vacancy rate in Vancouver: 0.9 per cent
How much more do new renters in Vancouver pay compared with renters who have occupied their home for at least a year: 27 per cent
This report by The Canadian Press was first published Oct. 17, 2024.
VANCOUVER – Voters along the south coast of British Columbia who have not cast their ballots yet will have to contend with heavy rain and high winds from an incoming atmospheric river weather system on election day.
Environment Canada says the weather system will bring prolonged heavy rain to Metro Vancouver, the Sunshine Coast, Fraser Valley, Howe Sound, Whistler and Vancouver Island starting Friday.
The agency says strong winds with gusts up to 80 kilometres an hour will also develop on Saturday — the day thousands are expected to go to the polls across B.C. — in parts of Vancouver Island and Metro Vancouver.
Wednesday was the last day for advance voting, which started on Oct. 10.
More than 180,000 voters cast their votes Wednesday — the most ever on an advance voting day in B.C., beating the record set just days earlier on Oct. 10 of more than 170,000 votes.
Environment Canada says voters in the area of the atmospheric river can expect around 70 millimetres of precipitation generally and up to 100 millimetres along the coastal mountains, while parts of Vancouver Island could see as much as 200 millimetres of rainfall for the weekend.
An atmospheric river system in November 2021 created severe flooding and landslides that at one point severed most rail links between Vancouver’s port and the rest of Canada while inundating communities in the Fraser Valley and B.C. Interior.
This report by The Canadian Press was first published Oct. 17, 2024.
