The seismic settlement announced by the National Association of Realtors earlier this month has not yet been approved, but it is already sending shockwaves through the real estate industry.
The mere prospect of a future settlement has already caused some Americans to change their behavior when buying and selling their homes. Some prospective homebuyers said they plan to restart their housing search after the new rules are in place in hopes of finding lower home prices, while some homesellersaren’t waiting for the new rules to take effect in July to lower — or even eliminate — the commission they offer to buyers’agents.
Housing experts say the $418 million settlement will effectively demolish the current real estate business model, in which home sellers pay both their agent and their buyers’ agent, which critics say inflated housing prices.
If approved by a judge, the settlement comes with new rules for Realtors.
“This is unchartered territory,” said Debra Dobbs, a Realtor in Chicago, of the potential new rules.
Potential for lower homebuying costs
The new rules could help lower home prices, experts say.
That’s what Jeremy Cannon, a 34-year-old teacher in Corona, California, hopes.
Last year, Cannon and his wife tried to buy their first home, putting in offers for multiple properties.
“All of our offers got denied because other people were bidding higher than us,” Cannon said. “We were already trying to bid above asking price for pretty much every place.”
At the time, Cannon decided to hit pause on his dream of owning a home. But, to Cannon, the new rules established by the NAR settlement could potentially clear what felt like an intractable hurdle for him: the high cost of housing.
Sales commissions, traditionally shared between a buyers’ agent and the agent who lists a home on the market, are usually between 5% and 6% of a home’s selling price. The median price of a home in the US is $417,000, according to census data, meaning the average seller could be paying more than $25,000 in brokerage fees.
Groups of sellers brought lawsuits against the NAR for this practice, alleging it was a violation of antitrust laws.
Under the proposed settlement terms, sellers’ agents will no longer be required to offer to share their commission with buyers’ agents, uncoupling commissions from home prices and opening the door to a more competitive housing market.
Many experts believe commission costs have been baked into home listings prices. Lower commissions could mean lower home prices.
“I think it could be helpful,” Cannon said. “I hope it might be cheaper and bring the prices of houses down more.”
He now plans to restart his home search this summer.
A price drop would be a much-needed reprieve for Cannon and others looking to buy a home: the median sales price of a new house has surged 21% since January 2020, according to census data.
The new rules also require agents to enter into written agreements with their buyers. Many agents plan to stipulate that if a home seller does not agree to pay their commission, their buyer is on the hook for that money.
But Cannon said if buying a home becomes more affordable, he would be willing to pay out-of-pocket for an agent, as long as it is “someone who has my interests in mind.”
Some are getting ahead of the new rules
Matt Hanley, a 49-year-old who works in insurance in Minnesota, has lived in his home since 2007. He was reacquainted with how real estate transactions work when he recently purchased a new home.
“We were confused,” he said. “I’m like ‘wow, I’m surprised the seller has to pay my agent’s commission.’ It seemed like a conflict of interest.”
Hanley now plans to list his home in April. After the NAR settlement was announced, though, he changed course: Instead of offering to pay a commission that would be split between his agent and his future buyers’ agent, he asked his agent to write “0%—negotiable” as the buyers’ agent commission on his home’s listing page.
“Why wait for the settlement? This is common knowledge now,” Hanley said. “I’m going to try to be at the start of this bell curve.”
Hanley’s experiment may be premature, though. The new rules will prohibit agents’ compensation from being included on centralized listing portals, which some critics say led agents to push more expensive properties on customers. But, for the time being, buyers’ agents will still be able to see that Hanley isn’t offering them compensation, potentially disincentivizing them from showing his home to clients.
But Hanley pointed to favorable conditions in his market as a reason that he believes buyers may still consider purchasing his home, even if they have to pay their realtor out-of-pocket.
“We’ve got everything going for us. We have no inventory in our area and we’re selling at peak time, so we said, ‘Let’s try it,’” he said. “If someone really wants it, they’re going to come up with their buyers’ fee.”
“They should be reporting to their agents, we should be reporting to ours,” he added.
‘It will take more than just a ruling’
Mariya Letdin, an associate professor of business at Florida State University, said this settlement has helped raise awareness that people have a right to negotiate. Even so, Letdin said it’s possible that the status quo is maintained.
“It’s up to the consumers on both the seller side and the buyer side to bring this to wide use,” she said. “I think it will take more than just a ruling. I think it will take consumers advocating for themselves and not being passive.”
“They now have a legally protected voice, and they should use it if we want to see change happen,” Letdin said.
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.
