I just finished reading your article in the October edition of REM (Real Estate Retainers, The Publisher’s Page), and I had to write to tell you that I could not agree with you more. I have often wondered (and discussed with other Realtors) why we are so desperate to give everything away for free. Why do buyers and sellers believe they have the right to waste our time looking at many different homes or getting us to tell them what their house is worth, even when they have no intention of dealing with us?

All of us have a story (if you have been in real estate long enough) about someone who has taken up weekend after weekend of our time only to change their mind and not buy a house, or buy privately, or wait until the Buyer Representation Agreement has expired to deal with another Realtor.

The reason, I believe, is that we encourage this type of behaviour from the public. We consistently offer FREE market evaluations, FREE tours of many, many houses that people may want to potentially purchase and FREE whatever else we can think of. There is no other profession (no respected one anyway) that I can think of where so much FREE stuff is offered with no promise/guarantee of payment for services provided. We cheapen our own image and value by doing this.

There have been many occasions where I have worked with first-time buyers who have asked me how much they have to pay for my services. They are often surprised when I explain to them that they do not pay me anything, and that I am paid out of the total commission that the seller pays.  The fact is, they have an expectation of paying for services rendered.  It is not the public, but us  Realtors, who insist on working for free.

Ask a contractor to renovate your home without a substantial down payment on the total renovation contract. Ask your local fitness club to give you a one-year membership that you only have to pay for if/when you actually use the facilities. Even your family doctor will not see you until you first provide your health card to the receptionist so they know they will be paid. For some reason, we insist on working for free with the hopes of making money IF a successful transaction takes place.

There is a very quick and easy way to change the system that would protect us as Realtors from people who just want to use us as tour-guides on a Sunday afternoon or who seem to think that we enjoy spending our weekends away from our families. It would ensure that when we invest time and energy into a client that we are actually reimbursed each and every time. It would also serve to protect the buyer from lazy Realtors who think the buyer should buy a house after only seeing one or two homes. Here is the idea (it makes sense, which pretty much means it will never happen, but I will tell it to you anyway):

When a potential buyer tells you they want to look at homes and you see this is someone you can work with, you sign a Buyer Representation Agreement and they pay a retainer ($1,000 for example).  The contract will state how many hours of your time they are entitled to for this money.  For example, $1,000 = 40 hours of services ( $25 per hour as a retainer). This is done to protect the buyer and ensure the Realtor does not just take the money and do nothing to justify the retainer. It is also done to protect the Realtor by ensuring they will receive some compensation for dealing with this person. If the buyer changes their mind about buying a house, or if they decide to buy privately (whatever the reason, if you cannot make a sale ) you at least have $1,000 to compensate your time and trouble. If, on the other hand, the buyer does purchase a house, they would be reimbursed the $1,000 from your commission on closing.  In the end, your services cost them NOTHING if they are a real buyer.  If, however, they just waste your time (which could be spent with other clients or actually living your life), they pay for that. 

Please don’t ask, “What about the people who don’t have $1,000?”  If they don’t have $1,000, how are they going to give a deposit with their offer or cover their closing costs?

Boris J. Bubas

Sales Representative

Re/Max Real Estate Centre

Kitchener, Ont.

I have had these same ideas since 2000 when I was first licensed. To write to you about it is preaching to the choir.

Nonetheless, I must write to you, because I would like to see this change implemented to our system of selling real property. I believe there are many other benefits than those you have mentioned. For example, consumers would carefully select their Realtor for selling and for buying as their own for representation, would not seek “second opinions”.

Also, these second opinions would not be so readily forthcoming because Realtors would not be inclined to work for free. Respect for agency agreements would rise, for Realtors and consumers alike. The Realtor divorce rate would be lower and the challenge to have a balance between work and other life activities would be more achievable because we would not be perceived as an EMS service operating 24/7. 

My question is, how? Any suggestions as to who we can take this to within the industry? OREA? CREA? Individual boards? Who can make this change happen?

Realtors, yes. The same ones who scramble every day – but what overseeing body would champion this cause?

Jennifer Rockburne

Broker

Royal LePage

Mississauga, Ont.