Real eState

Opinion | How much is a real estate agent worth to you?

Published

6 months ago

March 21, 2024

How much do you value the services of a real estate agent?

This might be a question you’ve never bothered to ask. According to the National Association of Realtors (NAR), about 90 percent of buyers and sellers used an agent last year, and mostly, that decision was probably automatic. Sellers needed them to get their homes on the Multiple Listing Service (MLS), a database of properties for sale that brokerages operate jointly. And buyers — well, maybe they haven’t needed agents in these days of Zillow and Redfin, but why not use them? After all, it costs them nothing, because the seller pays the fee.

But this arrangement has long been riddled with conflicts of interest and opportunities for collusion — which is one reason that Americans have been paying some of the highest real estate commissions in the world, typically about 6 percent split between the buyer’s and seller’s agents. Eventually, this invited lawsuits, and last year a Missouri jury thwacked NAR with a $1.8 billion verdict. Last week, apparently fearing more and worse to come, NAR announced a $418 million settlement that theoretically could radically change the way this market operates — by making it easier for sellers to negotiate fees and forcing buyers’ agents to work for their own clients, rather than for the sellers.

I say “theoretically” because, although for decades regulators and courts have been cracking down on too-cozy arrangements between real estate agents, the agents, with the enterprising spirit for which American business is so justly famed, kept finding new ways to maintain high fees. This could happen again. Yet the changes are substantial enough that it seems possible that this settlement will fundamentally alter how things are done. In which case Americans will have to ask themselves something they should have asked decades ago: How much is a real estate agent worth to you?

Follow this authorMegan McArdle‘s opinions

The answer, I’m confident, will be less than 6 percent.

Arguably, the value of brokerage services has been dropping since NAR was founded in 1908. Just imagine how hard it would have been to buy or sell a house without an agent when buyers and sellers had no easy way to know which properties were available, which neighborhoods might be appealing, how much houses usually sold for or whether a place you saw advertised was something you’d actually be interested in.

Since then, the MLS has made the market more transparent and efficient, and agents deserve credit for creating it. But the advent of automobiles made it easier for buyers to zip from open house to open house, and photographs enable them to rule out properties before visiting them — without needing an agent to help narrow their choices. And now the internet has changed the game entirely. Today, home buyers go online to see detailed photos, virtual tours and every home’s past sales history. The internet also instantly delivers other data that brokers might once have offered: neighborhood crime rates, schools, problem residents, coming local developments, what nearby houses have sold for.

This is not to say buyers’ agents are useless — they can let buyers into houses, help them fill out paperwork, make sure the termite inspection happens and hold people’s hands through the biggest transactions of their lives. But if I imagine how much I’d personally be willing to pay for these services, it’s somewhere between $500 and $2,000. Today, an agent who finds a buyer a $500,000 home typically collects many times that amount.

Sellers’ agents potentially add much more value than that through expert staging, price setting, marketing and negotiation. But that potential is not always realized.

Many sellers find their brokers by getting recommendations from friends, which probably selects for amiability, rather than skill. Research suggests that brokers often underprice homes, either by mistake or because it’s in their interest to sell houses quickly and move on to the next deal instead of waiting for top dollar. When real estate agents sell their own homes, they take a few more days to sell, but for 3.7 percent more, a 2005 study from economists Steven D. Levitt and Chad Syverson found. According to a study from 2012, which looked at a market where the listing service was unbundled from other services such as marketing and negotiation, and many sellers didn’t use agents, adding a broker to the transaction reduced the selling price by 5.9 to 7.7 percent, suggesting that without the value of MLS access, those brokers were worse than useless.

These studies are a bit dated, and of course there’s a lot of variance in agent performance; the best might add value for their clients, and the worst might subtract it. If this settlement shakes the lower-performing agents out of the market, this could be good for customers and the better realtors — and maybe even justify some sizeable fees.

Still, it’s hard to believe that brokers have on average grown vastly more useful or skilled since then. Rather, the internet keeps giving sellers more data and better tools to perform the functions that brokers once did. So it’s probably still true that the greatest value most agents offer is access to the MLS and the buyers who come through it. And it is also undoubtedly true that this service could be provided for considerably less than 6 percent of the sale price of your home.

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Real eState

Two Quebec real estate brokers suspended for using fake bids to drive up prices

Published

1 day ago

September 11, 2024

Anne Joseph

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.

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Montreal home sales, prices rise in August: real estate board

Published

6 days ago

September 6, 2024

Anne Joseph

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.

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Canada’s Best Cities for Renters in 2024: A Comprehensive Analysis

Published

2 months ago

July 24, 2024

Harry Miller

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.