If you want to operate a taxi in a big city, you have to have a license issued by the government. I am therefore confused that there are people without taxi licenses who give people rides for money, just like a taxi, and they can do so legally. I am told they can do that because, technically, they are not a taxi service but rather they are a ride-sharing system operated on the Internet. I am advised they are a different “business model”.

I know that to consult people on their medical well-being you must have a license to be a doctor. So I am confused that there are “medical consultants” who are allowed to operate without a license and tell people about what vitamins to take as well as consult on a variety of health-related issues from having children to what foods a person should eat. I am told they are a different “service”, not the same business model as doctors.

Story continues below

If you wish to advise people on legal matters, you have to have a license to be a lawyer. So I can’t figure out how so many people advise others on their legal rights in matters from immigration to labour relations to taxes and yet they are not licensed lawyers. Again I am told these people are in a different business model from lawyers.

I have spent over 35 years now watching the real estate industry. I always understood that if you want to act as a real estate agent for people who want to buy or sell property, you have to have a real estate license issued by the provincial government. I have watched the people in this business struggle with interpreting the laws that govern real estate licensing and I have seen these laws stretched and pulled in many different directions. I have seen a lot of non-licensed consultants in this business and I see them now. Many claim they are not the same “business model”.

I have seen all manner of different “business models” rolled out under the guise of credible real estate services that just don’t seem right to me but I cannot deny that they have been ruled legal in courts of law and wise legal opinion. I am embarrassed that after all these years of thinking I knew this business that I find myself lost in a sea of confusion of what is right and wrong. I have to ask myself this question: Why would anyone go to the trouble of getting a real estate license to charge people a negotiated fee or commission to help them buy or sell a house when it may not be necessary to have a license to do that?

I am adding this to the question that I have been asking for almost 20 years now. How come, in each job where people must have licenses, they have a fee structure approved by either the provincial or municipal governments who issue the licenses? In all cases the fees can be negotiated but there is a fee structure that all parties refer to when circumstances call for negotiations. That is, a base fee, often from a printed government book that outlines fees. Fees that can be adjusted when negotiated. That is the case with teachers, lawyers, doctors, dentists and yes, cab drivers.

I knew from the time I was 15-years-old that in Toronto, the base structure to pay a real estate agent was five per cent to sell your house if it was an exclusive listing and it was six per cent if the agent got the whole real estate community involved in selling the place by putting it on MLS. I agree that commission rates should be changed to reflect the difference of values from region to region but you need to at least have some guideline of a price for service to start from. What we have instead seems like the Wild West to me.

I know that, truth be told, out of all the people reading this, it is likely that both of you may not even have been born back when I was 15. I admit back in those days there were flim-flam artists and cheaters but nothing like we have today. Not even close. There was a lot more integrity in business back then.

That was our business model.

7 COMMENTS

  1. Heino,

    I recently had one of my submissions declined (for the first time) by Jim Adair. I had written a pointed letter in response to a regular submitter who exists here for the main purpose of trashing the industry — largely through an uniformed mind that is driven by an anti-organized real estate, agenda.

    I would welcome consumer anecdotes about anyone’s dealings with organized real estate — good or bad, or even a completed thought or argument about a perception held. Too much of what appears on REM would seem to be purely agenda driven and totally lacks any accountability. REM doesn’t seem to attract genuine consumer feedback, however it does attract shadowy people with agendas.

    Jez, who has submitted here, has made a blanket statement: “This will always raise questions about motivation, integrity and ethical business practices.”, in reference to: “work almost solely on a commission basis.” This anonymous contributor is casting aspersions on all of those of us who work on commission — just by virtue of the fact that is how we choose to be remunerated. No explanation whatsoever is offered by Jez, which should mean Jez’s allegation violates REM’s terms of use requirement to not: “contain hate speech”. Unexplained discrimination amounts to hate.

    Jez, concludes his/ her response by complementing your editorial commentary, despite the fact his/ her response didn’t address your main point, and as a matter of fact seemed to contradict it – while, all the while trying to give a reader the impression that you and Jez are basically on the same page. I don’t see how Jez’s contrived post complies with: “Do not make false or misleading statements”.

    Most law societies have a “taxing master” or equivalent to adjudicate between a consumer and a lawyer whom they believe has overcharged them — so clearly fees are not the be all and end all, or a panacea as opposed to the commissioned approach.

    Heino, REM shouldn’t feel the need to have lighter hands with those who have never bled a drop for this industry, but warm to the idea of our embalming — through whatever means. Apparently we have some pretty determined adversaries.

    • Alan,
      The reactions on this board is not a REM issue nor is it a real estate profession issue, this is an internet base forum issue. Anybody can say their opinion (the public or sales associates) and they can do this under fake identity.
      I have had my share of criticism (Coming, I believe from one person under several assumed names).
      The purpose of this board (as I see it) is to start conversations and have opinions on issues. Some are going to be stupid, some pushing a personal agenda and others illegal , but some will be enlightening.
      A smart reader will be able to distinguish.

      • Michel,

        It’s been my experience that even many in the industry are confused about the fundamentals. Consumers look to us to educate them on what this industry has to offer. Most consumers will choose to trust in the first instance and not look to be taken advantage of or tricked — so they won’t expect this forum to be something that can be exploited, by competing interests. When someone has the appearance of a paid contributor and they are going out of their way to mislead and misrepresent and lacerate this industry, the “terms of use” should be vigorously applied and interpreted– we, at least, owe it to consumers, if not ourselves.

  2. Most professions have a fee for service and in North America the real estate agencies work almost solely on a commission basis. This will always raise questions about motivation, integrity and ethical business practices. Heino, as always your editorial commentary has validity!

  3. Heino,

    Interesting letter. The “Wild West” is a fair comparison. Although men were generally acknowledged as being better suited to gun-fighting — notwithstanding a Sharon Stone character.

    It is remarkable how so many other walks of life can’t do without a basic fee structure – yet we must do without one, pursuant to Competition requirements. What is also remarkable about this situation is that those other businesses that have a fee structure are, almost, certainly going to get paid for their services every time — unlike licensed real estate practitioners who have, more often than not, worked on a pure “contingency” commission basis, and will lose money when a listing doesn’t sell.

    After reading Stan Albert’s piece recently here on REM, I wondered if organized real estate would simply be better off without a dedicated publication such as REM. The long and short of the totality of what goes to print here, basically depicts an industry that neither understands itself, nor respects itself. The true professions avoid advertising their weaknesses and openly competing with each other in a common publication, by promoting one approach to service as being inferior or better than another.

    Competent service isn’t something that should be debatable, in any industry worthy of being a professional industry. The fact that we debate what the aforesaid should entail, and that there are those who feel free to spin the meaning of “full service” around, until it stops at a point on their commission wheel that works with their perception of a marketable rate of commission, hurts our credibility as an industry. We need overt and dynamic leadership, not bureaucratic meddling and string pulling, if we are ever to get where we must go with this industry.

    Just look at your first response here from Jim — an active real estate practitioner, apparently. In the anecdote that he cited regarding the problem with the homes appliances, there doesn’t seem to be any indication that the seller’s REALTOR did anything wrong. Assuming the Seller lived in the home they probably knew about the issue. In any event, Jim indicates that he did his job in noticing the issue upon the Preclosing Inspection and reported it forward to the Buyer’s lawyer. Once in the hands of the lawyers, how they negotiated this problem became the key to a potential solution or not. The outcome of this situation reflected more on the Lawyers involved and not so much on organized real estate — Jim did his job.

    When I read Jim’s response, my first thought was, is he really a practitioner, or is he just someone taking another run at organised real estate. If I trust your terms of use, I must believe that you wouldn’t allow someone to pretend to be a real estate practitioner, if they were not. Jim’s first complaint seemed to be with a Buyer not remaining loyal – once again, this speaks to the Buyer’s character, not so much the shortcomings of organized real estate. No doubt Jim had some entitlements to be frustrated with the industry, but he failed to articulate them, here. Assuming Jim is for real, what he expressed here further proves the necessity to take this industry to a higher level, because his over-all bad experiences seemed to permanently screw shut the door, to his objectivity room.

    A consumers inclination to use unlicensed people for anything, will really come down to the respect that they have, or lack thereof, for the “value added” by those who hold a license.

  4. Hi; I have been in the business of buying and flipping real estate for 30 years. Bought and sold my own properties and didn’t need a license. Only in the last 4 years I have acquired my real estate licence. As you stated in your comment that there is no integrity in the business anymore. Nor is there loyalty. You can show someone 20 houses even with a buyer agreement but it doesn’t matter. What are you going to do …take them to court? ya right. Sold a young lady a home with the clause that all appliances must be in good working order. On an inspection of the property the day before close the microwave didn’t work-the stove had 2 elements not working and the fireplace blower not working. We informed my clients lawyer and he passed along the info to the sellers lawyer and all they said was that they were going to sue my client if they didn’t close the deal. The whole real estate industry is a ponzi scheme. What were we going to do-take two years to settle in court for $1000.00?. There is so much scamming going on in the industry that no wonder people don’t like real estate agents. They have made their own grade. Wont be keeping my licence too long. It has validated my take on real estate as a profession for 30 years.

    • Jim – Buying and flipping real estate is completely different than being a skilled and experienced Realtor assisting their clients not only buy and sell their largest asset but avoid the pitfalls and mine fields so prevalent in today’s litigious world. Everything from buying raw land, development, acreages, single family detached, different zoning pros and cons, strata developments, OCP’s, contract law, art of negotiation not to mention the world of effective marketing and lead generation doesn’t even scratch the surface of what a top producing Realtor must be on top of and also proficient.

      Your example and issue with the appliances should of been flushed out at the home inspection and before subjects were removed. If for some reason it got passed that point, than the agents and brokers would typically deal with it and a last resort would be small claims court…which rarely needs to happen. I don’t see how the sellers lawyer stating they were going to sue if the deal did not complete relates to the real estate industry what so ever.

LEAVE A REPLY

Please enter your comment!
Please enter your name here