New Rule Change Could Be 'Worst Thing Ever' for Realtors And Great News For Homebuyers, With This Real Estate | Canada News Media
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New Rule Change Could Be ‘Worst Thing Ever’ for Realtors And Great News For Homebuyers, With This Real Estate

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In a recent settlement, the National Association of Realtors agreed to change its rule so that anyone who lists a home for sale on any of its databases can no longer offer commission to the buyer’s agent.

If the court approves the settlement, the rule change would take place in mid-July. This could bring about a future where the seller would no longer be paying for the buyer’s agent, leading to more buyers being their own agents.

The changes would “decouple” the commissions owed to the buyer and seller agents, allowing more flexibility in negotiation, according to Stephen Brobeck, a senior fellow at the Consumer Federation of America.

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He estimates that over time, a home being sold for $500,000 would save $10,000 in commission costs, potentially lowering the price of homes being sold.

However, not everyone is convinced that buyers will benefit from the rule change, at least in the short term.

Lei Wedge, an associate professor specializing in real estate and investments at the University of South Florida, told Yahoo! Finance that “it’s going to be worse for the buyer” because “buyers will [probably] end up paying more money for the home because now they have to come up with a commission to pay their buyer agent because this is a seller’s market.”

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Even with those concerns, Wedge remains optimistic that over the longer term, it’ll bring progress in lowering costs as “[in] the rest of the world, the commission to sell a property is 2% to 3% … there’s no reason the average cost of selling a property in the United States is 5.49%.”

Markets have already started to price in the prospect of a major shake-up to the commission structure that occurs in today’s real estate transactions.

Before the settlement was determined, financial services firm Morningstar singled out CoStar Group Inc. (NASDAQ:CSGP), which owns homes.com, as a beneficiary, saying, “Homes.com should be largely unaffected from the direct implications of this lawsuit as it aims to monetize just one side of the transaction by selling advertisement products to enhance the exposure of seller listings on its platform.”

Meanwhile, Morningstar argued that “real estate portals like Zillow and Realtor.com stand to lose the most from the impacts of this decision as they make most of their revenue by routing buyer leads to real estate agents that buy its advertising products. Since the lawsuit mainly targets the buyer-side brokerage commission, therefore it can have a significant impact on Zillow (NASDAQ:Z) and Realtor.com.”

The stocks of CoStar and Zillow have diverged accordingly, with CoStar up about 18% in the past month compared to Zillow down over 3%.

Regardless of how the situation plays out, it’s left those in the real estate industry with significant uncertainty. According to Belinda Tucker, a Realtor who owns a firm in North Carolina, the changes will either “turn out to be a good thing” or “could turn out to be the worst thing ever.”

 

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Greater Toronto home sales jump in October after Bank of Canada rate cuts: board

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TORONTO – The Toronto Regional Real Estate Board says home sales in October surged as buyers continued moving off the sidelines amid lower interest rates.

The board said 6,658 homes changed hands last month in the Greater Toronto Area, up 44.4 per cent compared with 4,611 in the same month last year. Sales were up 14 per cent from September on a seasonally adjusted basis.

The average selling price was up 1.1 per cent compared with a year earlier at $1,135,215. The composite benchmark price, meant to represent the typical home, was down 3.3 per cent year-over-year.

“While we are still early in the Bank of Canada’s rate cutting cycle, it definitely does appear that an increasing number of buyers moved off the sidelines and back into the marketplace in October,” said TRREB president Jennifer Pearce in a news release.

“The positive affordability picture brought about by lower borrowing costs and relatively flat home prices prompted this improvement in market activity.”

The Bank of Canada has slashed its key interest rate four times since June, including a half-percentage point cut on Oct. 23. The rate now stands at 3.75 per cent, down from the high of five per cent that deterred many would-be buyers from the housing market.

New listings last month totalled 15,328, up 4.3 per cent from a year earlier.

In the City of Toronto, there were 2,509 sales last month, a 37.6 per cent jump from October 2023. Throughout the rest of the GTA, home sales rose 48.9 per cent to 4,149.

The sales uptick is encouraging, said Cameron Forbes, general manager and broker for Re/Max Realtron Realty Inc., who added the figures for October were stronger than he anticipated.

“I thought they’d be up for sure, but not necessarily that much,” said Forbes.

“Obviously, the 50 basis points was certainly a great move in the right direction. I just thought it would take more to get things going.”

He said it shows confidence in the market is returning faster than expected, especially among existing homeowners looking for a new property.

“The average consumer who’s employed and may have been able to get some increases in their wages over the last little bit to make up some ground with inflation, I think they’re confident, so they’re looking in the market.

“The conditions are nice because you’ve got a little more time, you’ve got more choice, you’ve got fewer other buyers to compete against.”

All property types saw more sales in October compared with a year ago throughout the GTA.

Townhouses led the surge with 56.8 per cent more sales, followed by detached homes at 46.6 per cent and semi-detached homes at 44 per cent. There were 33.4 per cent more condos that changed hands year-over-year.

“Market conditions did tighten in October, but there is still a lot of inventory and therefore choice for homebuyers,” said TRREB chief market analyst Jason Mercer.

“This choice will keep home price growth moderate over the next few months. However, as inventory is absorbed and home construction continues to lag population growth, selling price growth will accelerate, likely as we move through the spring of 2025.”

This report by The Canadian Press was first published Nov. 6, 2024.

The Canadian Press. All rights reserved.

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Homelessness: Tiny home village to open next week in Halifax suburb

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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.

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Here are some facts about British Columbia’s housing market

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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.

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