So You Want To List With A Discount Brokerage, Do You?


7 minute read

January 23, 2015

This is a contentious topic to some, but personally, I welcome it.

We’ve heard a lot in the past few months about “new real estate business models” popping up, both for sellers, and for buyers, and while I can’t exactly give you my entire thought process in less than 50,000 words, I can tell you about a situation I had recently that I think sums up with the “lesser” brokerages do for their sellers.

This isn’t opinion, and it’s not rhetoric.  This actually happened…


One of my wife’s relatives told me last week, very gingerly, “An argument could be formed that, well, participants in your industry are….very well compensated.”

I told him, “I don’t disagree.”

This is a successful man, whose words I cling to, with every breath.

“The top agents more than earn what they earn, but it’s the rest of them that deserve the public’s scorn.”

We have a mutual respect, and he knows that I take no insult.  He’s also in a line of work where the top participants are worth what they’re worth, and there’s a lot of bottom-feeders, corner-cutters, and folks who just shouldn’t be licensed to do what they’re doing.

“Either they’re overpaid, your you’re underpaid.  Have you ever thought of charging 6%?” he said, with a gigantic smile that I honestly thought was going to fall right off his face.

I don’t mind discussing compensation.

And I don’t mind discussing my business model, versus that of other business models within real estate.

If somebody already has their mind made up that, “All Realtors are the same, it’s a needless, stupid job, and I could do it,” then I can’t convince them to use my services, as a buyer agent, for free.

Again, you might argue, “Your services aren’t free, since the seller pays your commission, and that indirectly comes out of the buyer’s pocket.”  Agree to disagree, since about 99% of for sale by owners or discounted listings are priced (and often sell!) at 120% of fair market value.

Anyways, I’m doing what I said I wouldn’t, and that’s getting into a conversation that really deserves its fair share of time.

What I wanted to do today, was provide a real-life example of a situation that, I believe, shows how many inexperienced and discounted agents handle listings.

We can talk theoreticals all day, but when you see what really happens out there, it’s hard to argue with.

Late in December, I showed an entry-level condo in the King East area, listed at $329,900.

Now first thing’s first – I thought this was under-priced.

Had this property been my listing, I would have listed at $339,900.  But I also would have done this thing called “marketing,” which would help with the sale.

The listing had no photos.  Just a photo of the outside of the building, which was clearly downloaded from MLS.

The listing had no room measurements or descriptions.  It looked like this:


But that’s not the worst of it.

This condo had a den, and the unit wasn’t listed with one!  It didn’t show “1+1” for the bedrooms on MLS, nor did the “Rooms” above on MLS show the den.

That’s fine though, right?  It’s not like a den adds…….$20-$30K in value to a unit.  It’s not like many people searching for 1+1’s on MLS will type in “1+1” and therefore miss this listing, because it was erroneously listed as a 1-bed.

My clients and I went to see the property on the fourth or fifth day of the listing, and we really liked it.  We didn’t love it enough to make a full price, take-no-prisoners offer on the spot, but why would we?  There was no competition.

We ended up making an offer about a week into the listing, for $320,000.  That’s about $10K less than the asking price, which I actually felt was low, but what did we have to lose?

On the day we made the offer, I called the listing brokerage (small shop – automated message, asking you to press buttons to get a person on the phone), and I asked if there were any registered offers on the property.  The person on the other end of the line said that there weren’t any.

We made our offer on the property at around 3pm, and I emailed it to the listing agent.  His email was a “Hotmail” address, not to my surprise, and I registered the offer with his office.

I had the agent paged, asking him to call my cell phone, but I never heard back from him.

I called the brokerage back around 5:30pm, but by that point, even after pressing buttons like a monkey to try to get a person on the line, it eventually went to an “after hours” call centre.

My brokerage is open until 8:00pm, FYI…

I scoured high and low to find the listing agent’s cell phone number, but it wasn’t on the MLS listing, nor could it be found anywhere on the Internet.

My cell phone appears on all my MLS listings, FYI.  It’s also on my lockboxes, so that agents can call me direct with any questions, or problems with the lockbox.  It’s also all over my blog, the Bosley website, and other locations on the Internet.

The day turned to night, and I never got a response.

The next morning, around 11:00am, I got an email from the agent which read:

Hi Dave,

Thx for your efforts but another offer came in 2day and we accpt.

Bit higher, but time is importnt.

I’m on a flight 2day.  Email is best.

That’s verbatim.

And almost two months later, it really bothers me.

It’s not just that he spells “today” with a number.  I don’t understand it, or why Ariana Grande spells “cute” as “kewt,” but she gets a pass for reasons that probably don’t need explaining.

This guy had no excuse.  He was a grown man, and he doesn’t have 40,000,000 Twitter followers…

His email didn’t contain his cell phone number, so even though “email is best,” it’s not like I could have called him if I wanted to.

So where did he go wrong, how many rules did he break, and how much money did he cost his client?

Well for starters, he had to inform me of any competing offers, which he did not.

My offer was registered first (his email said “another offer came in 2day”), and thus a subsequent offer couldn’t be accepted without first notifying me of the offer, and allowing me an opportunity to resubmit.  My offer was made on the basis and knowledge of no competition.

My buyers’ offer of $320,000 was under asking, only because we had no reason to submit it as such.

If we were the second offer, we might have offered the full $329,900 asking price, or more.

But the agent just went ahead and took the “higher” offer (which ended up being $321,888), and called it a day.


Because he was flying to Aruba.  But we’ll come back to that in a sec…

This agent likely took this listing at 4% or less, as a known discount brokerage who has a handful of sub-par agents.  The seller saved over $3,000 in commission.

Had this agent done his job, or done what any experienced agent would have done, he’d have got his client $329,900 – which is $8,000 more than he got.

Where exactly is the value here?

Had he called me and said, “David, a second offer came in, do you want to improve your offer?”  I would have improved, 100%.  This isn’t hindsight talking, and it’s not sour grapes because my clients’ offer wasn’t accepted.  It’s just the way this business is, and it’s what would have happened.

Now, had he come back to me, then the other agent, then me, then the other agent, and so on, perhaps he could have got more than the asking price.

It’s not inconceivable to think that one week into the listing, with two offers on the table, that one of the buyers would have paid a small premium – say $2,000 – $4,000 over asking, to get the property, stop searching, and move in thirty days.

Maybe this agent could have got $335,000 for the property.

Maybe he could have got $13,000 more than he did.

We’ll never know, because he didn’t bother.

He simply “took the higher offer,” and then caught his plane to Aruba.

And as I said at the beginning, I felt the property should have been $339,900 to begin with, if it was staged and well-marketed.  But I can guarantee this guy just had his seller sign the papers, with no mention of how to maximize the property’s potential.  Maybe he could have got the seller almost $20,000 more than he eventually did.

When the sale price was published on MLS, I called him for a bit of clarification.  His defence?

“Come on man, you know how it is.  I was leaving for a trip, I wanted to get it tied up.  I didn’t have time to go back and forth all day, and I didn’t want somebody else doing the deal or I’d have to pay.  You know?”

Yes, I know.

But I don’t agree.  That’s not how I run my business.

When I was in Idaho last summer, I had a colleague sell one of my listings, and she received 25% of my commission.  I had another colleague do a deal for a buyer client, and she received 50%.  That is how I run my business; I service the client, not my own pocket-book.

This would-be Aruba-traveler, didn’t want to spend the day working for his client, because he feared if it went past his flight time, he might have to (gasp!) get a colleague to help, and pay him or her for their services.

Had he not been flying to Aruba, I don’t think he would have worked with the two offers anyways.

The listing was filled with errors and blank spaces, the property wasn’t marketed, his communication with me (and assuming other agents as well) was terrible, and he seemed to take the path of least resistance at every step.

He is the epitome of a discount agent in Toronto’s 2015 market, and he’s what I tell people to avoid.

A good portion of the public seems to believe, “The lower commission you pay, the better deal you get.”

As I just outlined above, it doesn’t really work out that way in practice.

This is just one of my many experiences with discount agents, and fly-by-nighters, but I see it all the time.

I firmly believe that “you get what you pay for,” and if you can hire a top Toronto agent for the same price as some of the middling agents are charging, then there is your value proposition! Because while Realtor #200 out of 40,000 in Toronto is charging the standard 5% commission, so too may be Realtor #18,000.

I work on the buy-side as often as the sell side, and I love negotiating against these discount agents as I can’t tell you how quick they are to tell their sellers “take the deal.”  They’re looking for a paycheque – to come up with rent money, or put food on the proverbial table.

That is who you want selling your largest investment, for top dollar?

Anyways, that’s it.  I feel like this turned into a sales pitch, and that’s not what I intended.

Questions on this topic?  Please ask away.  I’ll be in the office most of the day tomorrow, so I’ll try to get to the comments section periodically.

Have a great weekend!

Written By David Fleming

David Fleming is the author of Toronto Realty Blog, founded in 2007. He combined his passion for writing and real estate to create a space for honest information and two-way communication in a complex and dynamic market. David is a licensed Broker and the Broker of Record for Bosley – Toronto Realty Group

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  1. Pingback: So You Want To List With A Discount Brokerage, Do You? |
  2. Anita merlo

    at 8:06 am

    Well said David. There is no further point to add to this other than the 5% rate is not entirely earned by the listing agent. It get split 4 ways before taxes and expenses. And it is EARNED.

  3. Emma

    at 8:21 am

    Yes David, I agree with Anita – there is nothing else to to point out. You have basically said what i feel. Good Agents work 110% for there clients.

  4. Appraiser

    at 9:04 am

    I see it all of the time. When I appraise an MLS sale, the appraisal is usually straightforward with lots of good comparables to choose from that easily support the sale price. Occasionally, I will come across a deal where the sale price is obviously low. Invariably the listing is with a post-only and / or discount brokerage.

    I always chuckle (to myself) when I hear the seller proudly recount how much money they “saved” on the deal.

    1. anita merlo

      at 9:44 am

      Its refreshing to hear this from an appraiser.

  5. daniel

    at 9:56 am

    I guess the challenge is that lots of “full service” brokers offer a similar level of service as this schmuck you dealt with. But perhaps more relevant than the thousands of hacks out there are the fairly substantial number of agents who avoid the ridiculous blunders (no photos, incorrect stats, etc) but who do nothing exceptional to market the property and still earn the full commission. I understand how the limited number of deals the typical agent does means they don’t earn exceptional money, however, from the customers perspective that’s irrelevant. The $30,000 i’d pay a broker to sell my house is still $30k, and my strong impression is that a typical toronto broker would put in maybe a dozen hours on the sale, meaning i’m paying $2,500 for the privilege.

    Also, remember that study on brokers listing their own houses that was in Freakonomics? If not, check it out. Basically, brokers own listings take longer to sell, suggesting that the tendency of listing agents to prioritize getting a deal done over maxing price is systemic and not limited to the “bad apples”.

    So, my impression is that when selling my house i’m going to pay the price of a new car for the service and, statistically speaking, i’m likely to not get top dollar because that’s not in my agent’s interest.

    I will add that clearly there are some stellar agents who do entirely earn their money and do add a lot of value, the riddle as a consumer is finding them. I know the standard tactics (interviews, references, asking for a marketing plan, etc) however i think that improves your odds of getting an agent who earns their pay, but doesn’t come close to assuring it.

    David, i’m curious to know your thoughts on the investment advisory world and their compensation vs value add and how that compares to RE agents.

    Love the blog

    1. Appraiser

      at 11:01 am

      @ daniel: There is an important differentiation to be made between price and value, that some people simply cannot overcome.

      Some investments advisors (Garth Turner) like to brag that they only charge 1% of your portfolio to manage your money. What many people fail to realize is that it is 1% EVERY YEAR. In addition, there is little protection for your hard-earned money if an advisor decides pull a Bernie Madoff with your cash.

      1. Libertarian

        at 12:20 pm

        Of course Garth Turner charges 1% EVERY YEAR – he works with you on an on-going basis. As long as you have your money with him, he provides advice to you. A real estate agent works with you for a month or two, until your transaction is complete. That’s it. If you live in the house for the next 5 or 10 years, the agent doesn’t do anything for you. As everyone else is pointing out, the question is whether the real estate agent does enough to earn his/her commission. I get the sense that David does.

        Also, Garth Turner is licensed. There are many rules that his employer and industry have. It’s nearly impossible for him to pull a Bernie Madoff with your money. If he could do it, so could a real estate agent and/or developer. Just ask the buyers of that condo in North York.

        1. Appraiser

          at 7:09 pm

          @ Libertarian:

          Real estate deposits held by a real estate brokerage in Ontario are covered by insurance.

          In the case you are referencing it was a lawyer who held the deposits for a new condo development, who apparently “released” those funds to the developer and then disappeared.

          Big difference.

          Oh, and if you don’t mind handing over 5% of your portfolio to Garth Turner after 5 years (whether you make money or not) that’s your business.

          1. Capital One

            at 11:55 pm

            My question is – why are realtors (or financial planners) paid a %? Does it take 2 times the effort to market at $800,000 home (or manage a $800,000 portfolio) vs $400,000? My mechanic doesn’t charge based on the value of my car.

            IMHO, realtors should be ambivalent to the prices trends in the market. Their organizations shouldn’t be rejoicing in rising prices (“another banner year”). Half of them work for the buyers after all – who presumably would like to see low prices. However, tying a realtor’s compensation to the price of the house is an incentive – possibly minor, but an incentive nonetheless – to do what he/she can do to keep prices moving up.

            And Turner isn’t particularly anti-realtor (individuals). He strongly recommends getting one to market your house and he heaps much disdain on FSBOs. And Realtor Associations.


    2. Kyle

      at 9:57 am

      From my personal experience, i definitely see the value that a full service Realtor adds vs a discount one. On the other hand i do not see the value that a full service Financial Planner adds vs the free ones that are widely available. In fact after fees, most investors are better off with a free Bank affiliated Planner or simply managing their own accounts.

      1. mortgageJAKE

        at 6:19 pm

        I can’t believe I just read that, Kyle. Really? Your definition of “free” bank reps should be in quotes because there’s nothing FREE when you pay ridiculous MERs or are put into absurd investments via the bank. DIY or fee-based model should be your only option, not % model i.e. full service financial planner / stock trader.

        It also depends on your capital that you have.

        But please, do not tell the public that bank reps are free. They aren’t.

  6. Marina

    at 10:01 am

    I get tremendously bothered when my neighbors do this and inadvertently bring down the price of comparables in the neighborhood. A house three doors over sold a month ago for at least 50K less than it should have. But they had to do about 4-5K worth of minor repairs and major cleaning to realize the full value. Then they listed with some cheap incompetent doorknob.
    I had to have a little lie-down when I saw the final sale price.

    1. Capital One

      at 12:44 am

      Your former neighbours had absolutely no obligation to you or anyone else to keep the prices up in your neighbourhood. Presumably, they and the buyers were happy with the price. Perhaps they saved $45k in realtors fees?

      As our host explained in a previous post about “are Toronto’s houses overpriced?”, the market determines the price. You can’t have it both ways.


  7. Andrea

    at 10:33 am

    Don’t most purchasers automatically take into consideration the reduced commission to be paid, and adjust their offer accordingly? What are the sellers really saving? We never have, never will sell a property without the guidance of a professional realtor. It just doesn’t make sense to go it alone.

  8. Chroscklh

    at 10:36 am

    Is true – good realtor earn this money. And I belief for-sale-by-owner likely leave money on table top and have fool for realtor – in most case, some folk know how 2 market. Most cannot. BUT I wish realtor had trip advisor rating like restaurant,sex club or public toilet. I sell many property in lifetime, always work with realtor – I have fired idiot (when I realize law in this country says no choking – my country, choke is how u formal signal end to contract!), I have worked with brilliant who knew market like back of bear paw (speaking of own pet bear, of course) and I work with highly reputable and success realtor who I felt got deal done INSPITE of himself for he make the many mistake. Also, I make the respect for realtor who run his business well -but clearly sometime not in best interest of client – you know type: initial meeting he say “Oh I would list at $1.15-1.2mm…I will pay for full staging – top to bottom” – after sign contract, he say “Hmm…market soften you know. I say $999k is right price…staging? nah, this place no need staging. Just maybe put bear in kennel” So, as adversary/business man – I respect bait-hook-switch-fish, but I be like “Chroscklh see what u do there.” So, yeah, trip advisor or Home Star rating “he a good realtor…enjoy work with him…trustworthy” or “good realtor…no like attitude…he kick my dog, but sold house.” – good to know this

  9. Irena

    at 10:37 am

    When I go and search the mls for newly listed condos, I can not tell you how frustrating it is to see no pictures or details about the property. I almost always click off the listing and now I have even resorted to emailing the agent asking if they even want to sell the property they are representing. We have always used an agent and they have always gotten us a top dollar. They are worth every penny.

  10. Thom MacDougal

    at 10:44 am

    In October my wife and I went to look at a FSBO in the west end that was listed at $890k. The house needed a ton of work and there was an egregious error in the listing about the parking situation that my wife (an agent) kindly pointed out to them. Anyway, the sellers seemed confident the sale would be a slam-dunk and specifically stated they would not work with buyer agents. However, we were shopping for ourselves. A few days later we submitted what we thought was a fair offer. Suffice to say, we never heard back from the sellers. Not a peep. Weeks passed, during which the sellers held no fewer than 3 2-day open houses. Eventually, the sellers caved and signed with a top-selling broker, who corrected the errors in their listing and finally got their stale listing sold. After commissions and HST…the sellers cleared about $10k LESS than if they had accepted our offer in the first place. Yep, they got a discount alright.

  11. rob fjord

    at 11:01 am

    yes agents are still required for stupid people, the rest of us will sell for ourselves on the internet….within 5 years.

    1. Long Time Realtor

      at 6:51 pm

      @ rob fjord: Seems I heard that story 5 years ago, and 5 years before that, and 5 years before that and….

      Even in the U.S. where they have Zillow, Trulia and Redfin, only 10% of real estate transactions are done privately. Just like before. Must be a lot of stupid people, eh?

      Go figure.

      1. Capital One

        at 12:06 am

        Zillow is more like than a FSBO site. Most of the listing are from agents (and now has the the discount brokerages’ listings). The big difference is quality of information that it provides prospective buyers. We need this in Canada. Buyers are at a disadvantage.

        I really hope the Competition Bureau prevails over TREB on this issue.


        1. jimbo

          at 2:30 am

 check it out.

        2. Appraiser

          at 7:47 am

          @ C O:

          Regarding Zillow You will have to fill me in on exactly the kind of vital “quality information” that’s apparently missing from If you are reffering to days on market data, well that’s hardly a game-changer. And if you are touting the quality of the the so-called ‘Zestimates’ of market value provide by Zillow they you are way off base. It is no secret that “Zestimates” are so inconsistent and inaccurate that they are practically worthless. Their algorithim is based on zip codes and is full of holes. Not a single lender in the U.S. will accept a “Zestimate” as anything faintly resembling market value – that should tell you something.

          1. Capital One

            at 9:28 am

            Days on Market
            Listing History (including relistings)
            Price History
            Selling History of every house in the neighbourhood
            Estimated Value (it’s a good starting point)
            Estimated Value of every other house in the neighbourhood

            You know – the stuff TREB wants to keep out of the public domain.


          2. David Fleming

            at 9:30 am

            @ Appraiser & Capital One

            I agree with appraiser here that “days on market” is a useless statistic, for many reasons, but mainly:

            1) You can terminate a listing and re-list or “re-run” as we call it in the business, thereby stopping the DOM counter, and re-starting it at zero.
            2) Many houses listed with set “offer dates” essentially pre-determine that DOM will be 6, 7, or 8, right from the get-go.
            3) A lot of real estate investors who have tenanted properties list their properties high, come down gradually over time, and don’t expect to get it sold within the first 60 days.

            1. Capital One

              at 8:06 pm

              David. Don’t agree. Yes, the raw DOM number can be gamed, but Zillow gives the listing history. On/off the market, price changes. This is much better than in this regard (when a relisted property shows up as “new”).


        3. Appraiser

          at 12:18 pm

          Regarding Zillow: Aside from puerile curiosity, I can’t fathom how any of the information you list is vital in any way. Other than the fact that it is not readily available in Canada, the information you describe is nothing more than data overload to amuse the thousands of people who simply “play” on the computer every day window shopping and kicking tires.

          P.S. Realtors and appraisers have to pay for much of the data you describe. Access to Geowarehouse data alone costs $5,000 a year. Data which is NOT controlled by Realtors. Do you want it for free, or would you be willing to pay a subscription fee?

          1. Capital One

            at 2:44 pm

            So – which is it? Non-vital information or valuable information?


          2. Appraiser

            at 5:11 pm

            @ C O

            So which data are you referring to, that which is controlled by Realtors or not?

            Much of the information is valuable to boots-on-the-ground real estate professionals, who are willing to pay for it, not tire kickers who worship Garth Turner.

            Here’s a tip, Turner pretends to know a great deal more about real estate than he actually does. My guess is you do too.

            1. Capital One

              at 6:05 pm

              I gave the list of the information that I would find useful when buying or selling a house. I really don’t care if you think I can find it useful or not. But if it’s useful to realtors, why wouldn’t it be useful to others? And if there is a model or service, like Zillow, where others compile and present the information, why would you care who pays? I can’t imagine this being a threat the appraiser business. As you mentioned, no lender would use this information as the basis of a loan.

              I’m not sure where Turner comes into all of this, but good ad hominem attack!


            2. jimbo

              at 6:16 pm

              Viewpoint allows people in Nova Scotia the ability to see Days on Market, Listing History (including relistings), Price History and Selling History of every house sold in the last 5 years within the neighbourhood (if currently for sale), Appraised Value (used by the local tax authority) and I think the apprised Value of every other house in the neighbourhood.

              Not sure why other brokrages in the Toronto area don’t do the same.

          3. David Fleming

            at 10:53 am

            @ Appraiser

            I find the historical information on sites like Zillow to be useless.

            When I get those admail flyers from other Realtors that show so-called “average sale prices” in my building, I laugh when they’re taking an average from TWO sales!

            Zillow often does the same thing. If there were 25 sales in a building, in four months, for 2-bed, 2-bath units, then I would trust an “average price per square foot.” But barring that kind of quantity, I don’t care for the averages.

            Same goes for houses, where they use square footage (notice how we don’t use a PPSQFT for freehold in Toronto?), which I find useless because some basements are unfinished, some are semi-finished, and some have 9-foot ceilings, above grade windows, and are nicer spaces than the rest of the house!

            It might help, however, to know when the house last sold. If it sold for $700,000 in January of 2010, and it’s now listed for $1,000,000 five years later, then you can evaluate whether an 8.6% annual appreciation is warranted.

        4. Long Time Realtor

          at 7:29 pm

          @ Capital One:

          I hate to burst your bubble, but it is high time that you disabused yourself of the notion that Zillow and the like, are providing invaluable information to consumers that Canadian Realtors are deliberately witholding from the Canadian public.

          Much of their info is so inaccurate or out of date, as to be useless. Or worse – misleading.

          If you want official, verifiable land registry, assessment or MLS information, either hire a Realtor who pays for access to the data, or log on to MPAC and Geowarehouse, and get out your credit card.

          You have been duped.

          1. Capital One

            at 1:01 am

            Long-Time Realtor:

            Just looked up the houses we’ve owned in the States (we have owned two). Absolutely 100% correct. And the data is from the ’90s.

            I will hire (and have hired) hire a realtor who is very good at marketing and negotiating. As I’ve said before, I really do believe that realtors add value. And appraisers for that matter. If I were a lender, an good appraiser would be my best friend.

            Not sure what the issue is about providing the zillow-like data is. Apparently (thanks Jimbo – I didn’t know existed) it’s OK in other areas in Canada. In fact, I would assume there would be some vested interest in realtors making sure it was correct.

            – add “anecdotal fallacy” to your ad hominem attack. If I show you 2 properties that are 100% correct, does that mean it’s always accurate? Because I can. What about 60? 4,000?

            Most of the data that I believe should be in the public domain are facts. Don’t need to argue about facts. We don’t argue about who the PM was in 1927 anymore because we can google it. So – 4 of the 6 measures I listed are facts. Why hide them? If I believe that I need an expert to help decipher them – I’ll do it,

            The other 2 (estimated value of a house and the estimated value of houses in the neighbourhood) – these are interesting. And these may need a “use at your own risk” label. But the others are facts.

            Perhaps you could wade in here and give viewpoint of a realtor? Again – I see value in the services that realtors and appraisers provide. But why on earth are you going to court to hide this info? Paternalism? As in – it’s in the interest of the masses that they don’t know? This reminds me of the 1980s when you had to go through a realtor to get any and all information. Did opening up the info via hurt anyone?


            1. David Fleming

              at 9:27 am

              @ Capital One

              Just as I am all for the “discount brokerage” model, which allows us full-service Realtors to differentiate ourselves, I am also in favour of opening up access to public information.

              It won’t be long before Zoocasa, Zolo, and other sites will give out this information, thumb their noses at CREA, and say “Sue me.”

              My voice has been drowned out by the old-guard of real estate that wants us to keep quiet and tow the company line.

              A lot of what you’re saying makes sense, as do the counter arguments from Appraiser, LTR, et al. It’s why multiple real estate brokerage business models must be available to consumers so that THEY can choose.

            2. Capital One

              at 8:00 pm

              David – agreed.

  12. Joel

    at 11:20 am

    Is there a sliding scale for commission on high value properties? ie. $5 million homes are generally sold at 4%

  13. Kyle

    at 11:21 am

    There are a lot of models, but these would be my observations/opinions:

    Seller’s options:
    Pay 4-5% for a top agent and get top results. Money well-spent.
    Pay 4-5% for a mediocre agent. Same price as a top agent, so why not use a top agent?
    Pay less than 4% for a discount agent. You might as well DIY, then at least someone will be working for you
    Pay a flat fee for an mls listing and DIY. Can work for some people, but not for everyone
    Pay a flat fee to be on a “by-owner” site. Might as well make your own lawn sign out of cardboard and crayon

    Buyer’s options:
    Pay nothing, use a top agent. No brainer, as long as agent has time for you.
    Pay nothing, use a mediocre agent. OK option if agent is willing to work hard and has time
    Try buying from a discount or “by-owner” seller. Only for patient people with lots of restraint
    Buy with a rebate agent. Good option, if you are seasoned.

    1. Joe Q.

      at 2:10 pm

      The challenge can be in distinguishing a top agent from a mediocre agent.

      1. Kyle

        at 2:42 pm

        I don’t think it’s that difficult, in my experience this is one area where past performance is a good indicator of future performance. The number of deals an agent does and how long they’ve been producing is a pretty good indicator that their a top agent. Not perfect, but generally speaking good agents produce consistently good results, which gets them more business and keeps them in business for longer. The discount agent in the story above will be lucky to do a handful of deals a year. Top agents do that in a month.

      2. Kyle

        at 2:55 pm

        One other thing i would add, is that i want to know how many times the Agent has bought or sold their own home. If the Agent still lives with his parents or rents a place, sorry you’re not getting my business.

        1. anita merlo

          at 3:30 pm

          I suppose if there is an agreed
          commission for a 10 day listing
          then the same fee schedule should apply
          to a 40 day listing or 65 day listing of charging more
          as you go?
          the fee is the fee. Sometimes
          homes sell fast. Usually at top price.
          as of the fall of 2014 only 32%
          Of homes sold over asking.

      3. jeff316

        at 1:28 pm

        I agree with Joe, I think it’s tough to spot the difference between top and mediocre agents until you’ve completed the process, after which it is usually too late.

        What makes a “top” agent, too, changes from buyer to buyer.

        Is it getting top dollar for your house? Is providing good customer service? Is it providing the personal, one-on-one touch? Is it being easy to work with?

        I can tell you which agent gets top dollar in my neighbourhood. But I can also tell you that this agent pretty much fails on the other three criteria.

        There are few “top” realtors who can do all those things well, and for many sellers (particularly in this sellers market) it may not all come down to getting an extra 3000$ out of buyers.

    2. Mark

      at 5:45 pm

      Oops, you forgot to mention the BEST options available in Ontario today:

      Pay $500 flat-fee to list with a top full-service agent. Pay $1,500 + 2.5% commission on closing

      Pay nothing, use a top full-service agent. Get 50% Cash Back of his/her 2.5% commission on closing

      You’re welcome! 🙂

  14. anita merlo

    at 12:35 pm

    Quite offen from first meeting with
    a potential client to a sale or buy
    on average takes 6month s to a year.
    AND during that time some sellers
    and buyers change their minds.
    so a realtor does work for free…
    ask any successful active agent
    and they will tell you that sometimes
    work done does not always end
    with a transaction as peoples circumstances change.

  15. Ed

    at 2:32 pm

    Let’s say I decide to list my house for sale with you David.
    You appraise my home, do all the right things, assess the market and the neighbourhood and opine that a listing at 10% lower than fair market value will maximize the sales price.
    So we list the house as you recommend, have an open house on the weekend and accept offers the Tuesday following. Things work as planned and the house is sold in a week at an acceptable price.
    Here is my question to you and others here. Has the listing agent earned the 2.5% commission?
    On my $800,000 home can the listing agent justify a $20,000 commission for a week and a half of work?
    It’s my opinion that there needs to be an alternative commission pricing model for sales such as this. Agreed??

    1. crazyegg

      at 3:41 pm

      Hi Ed,

      There already is an “alternative commission pricing model”. The Competition Bureau forced the hand of traditional brokerages and “created” the discount model that we see today.

      No one is forcing you to use a “full service broker”. If you do not feel that 2.5% is well earned, than you should perhaps consider “discount” or FSBO?

      PS: My previous broker called it best (assuming you are in the USA without OHIP): Would you bargain with your heart surgeon? Was that 2 hour procedure with $100,000? You could have gone to Dr Nick Riviera and he would have done it for $999 and a Happy Meal,


      1. Ed

        at 3:50 pm


        Am I to take it that you feel the $20,000 commission for a week and a half of work is fair?

        1. crazyegg

          at 4:19 pm

          Hi Ed,

          Only you (the client) can determine what “is fair”. If you do not feel that it is fair, then why on earth would you sign the listing agreement?

          If the listing agent fulfilled all of your expectations and you had a positive selling experience as you described above, then why is this even an issue? The listing agreement if any broker (be it traditional or discount) must clearly specify the total commissions to be paid. There should be no surprises.

          PS: But to answer your question if you must: If the outcome is as positive as you described previously in your email, all things being equal, then yes I would consider a $20,000 to be fair.


        2. Long Time Realtor

          at 6:58 pm


          Would you prefer that it took 6 months to sell your home in the misguided belief that the appearance of effort and the additional time frame somehow trumps results?

          1. Cynthia

            at 12:15 am

            I agree that $20,000 commission for a week and half work was fair if you got the service you paid for. Keep in mind…just because the SOLD sign went up on the house a week and half later doesnt mean the deal is done. It isnt done until after clsoing which can be a week alter of five months later… Your realtor qualifies the potential buyers coming through your home. Negotiated a fantastic price for your home over ask. Makes sure that all deadlines are met and followed through… Ensures closing goes smoothly, etc. As a Realtor I provide at least 189 things i do for a client…. Can a discounted agent say that and produce proof?

    2. Donny

      at 4:00 pm

      We don’t have the luxury of knowing exactly what is going to happen ahead of time like you do. Hindsight is great isn’t it?

    3. Donny

      at 4:02 pm

      Garth Turner may not be able to steal all your money by law but what law prevents him from losing it all?

    4. Christian

      at 10:40 pm

      Ed, good point! Let me clarify (not speaking on Davids behalf). The week and a half of work would cost you probably $ 1,280 give or take. The remaining $18,720 is what you pay for all the accumulated experience that a good agent would have. That’s what you pay for years of knowledge of the market, the product, how to handle individuals in stressful situations, negotiate, read people on the other side of the table, know what marketing tools to apply when and so on. Makes sense?

      1. jeff316

        at 1:37 pm

        Well said.

  16. anita merlo

    at 3:47 pm

    Good one crazyegg!

  17. anita merlo

    at 3:55 pm

    Yes. A weeks work is hardly a weeks work.

  18. steve

    at 5:03 pm

    Don’t EVER list such an expensive item like a house or condo with an amateur …. you’re more likely to lose money. Oh, and if you have a substantial nest egg, the 1% per year to get a professional will more than often earn you a better return.

  19. Duncan

    at 11:40 am

    I think the main problem here is that the general public seems to think that there is only a weeks worth of work when a house sells in 7 days. In many cases there is months worth of work by the realtor and the people who work in both brokerages. The sales rep first needs to prep for the listing presentation, develop a marketing plan and walk the sellers through the plan. In many cases the house needs to be prepped (i.e.: staging) which includes hand holding to get the clients to declutter & make any repairs etc that need to be done in the timeline. After pics have been taken and sorted by the agent and the listing is prepared the property goes on the market and now the brokerage’s staff go over the listing to make sure all the paperwork is in order and complies with our strict laws and then will book appointments. In most cases and especially with a hot property this involves the front desk staff taking numerous calls from other agents, then calling the homeowners to confirm the time and then calling back the agents office to confirm the appt. Once the property is sold the agents and brokerages job still is not done. Continuous follow up calls are made to make sure the deal actually closes. Appointments are still being booked for follow up showings and appraisers etc. Both brokerages also has a Deal Secretary and other staff that are required to make sure that the deal closes smoothly for the seller and the buyer by making sure that the lawyer and mortgage grantor have all the documents they require in the time line… All of these behind the scenes people don’t work for free! To conclude, this is what you are paying for when you use a Full Service Brokerage and without it the chances of a deal not closing are much higher. Please note I am not a Real Estate Professional but I have worked in the industry for over 25yrs and I fully support the commissions paid to those who provide the full service.

  20. It's me.

    at 1:04 pm

    This sounds like something Jason Allen Garland would do. Unprofessional at every turn.

  21. Andrew

    at 2:51 pm

    Why don’t you hire a discount brokerage and tell the agent you will pay for the photos. They will not cost more than 200 dollars. Make sure you know the numbers and stick to your price. This way you are saving money in the process. Anyone paying 5 percent for a “good realtor” is the dumbest person I know.

  22. anita merlo

    at 3:27 pm

    Andrew. I guess you are the smartest
    person you know.

  23. Andrew

    at 11:47 pm

    yes Anita……how is making one sale every 6 months working for you?

  24. anita merlo

    at 8:49 am

    Your brilliance is astounding
    Andrew! 40 sales a year for the last 30 yrs
    smartass! Know your numbers
    before garbage flows from your
    idiotic mouth!

    1. Andrew

      at 2:37 pm

      Prove it! With grammar like that, I would never hire you. Form a proper sentence, and maybe I will take you seriously.

  25. TG

    at 12:12 am

    I’m a realtor and have been since 1991. Just wondering…between Mr Flemming only out of respect do I call him that name as that’s how I’ve been brought up and all you other realtor agreeing with him about the commission should be 5%… wondering are you all in LaLa land or high on some good crack. First of all there is no industry standard and never has been, secondly to become a realtor it only costs a few thousand dollars and a bit of time out of your life, thirdly the only marketing a so called full service realtor does is marketing his/her face and name and lastly which I could go on and on the brokers are making a S@#T load of money off the realtor and hiring anything with a pulse THEN why F! don’t you charge 7% or 8%?? I think maybe you are all worth that or more. Why do you only want 2.5% as a buyer agent? CRAP!! Why shouldn’t we make more than doctors, dentist, lawyers as our incomes are somewhat close at least for the 5 or 10% of us. WAKE UP!! people as a loyal dedicated realtor I AND definitely 99% of you are not worth or deserving of making $300, $500k a year or for that matter even $100k a year for what we do. You are all a bunch of hypocrits (spelling?) cause you are all cutting commission and stop your wining and be thankful that you even get any business at all out of 41,000 agents. Instead concentrate on the one listing or buyer you do have and give them top notch service so that the perception of the consumer doesn’t look at us like we are slim and cheap car sales people….no disrespect to you car guys it’s just the term I’ve heard many times……. maybe you guys should change too

    1. Andrew

      at 2:42 pm

      Ask Mr. Fleming what marketing he does. His listings look just as generic as any top producing or discount Agent out there.

  26. condodweller

    at 12:44 am

    No matter how much full service real estate agents try to justify their commissions, I’m sure most will admit to themselves that with today’s high prices and short time on the market, a seller forking over more than a family of two minimum wage income earners make in a year is unfair.

    It’s great that there are discount brokers and properties can be listed on MLS for a small fee if one is willing to do the work, however the last hurdle is the buyer’s agent’s commission. I sold my last condo myself, I paid for an MLS listing and paid for staging the place. I offered 2.5% to the buyer’s agent as I was pressed for time. I had at least one showing each day and received an offer after about four days and sold for a fair price. I was glad I was able to save about $10k on the seller side, however forking over the 2.5% left a bad taste in my mouth. Especially because I was out of pocket exactly that 2.5% between the sale and purchase of my new place.

    It’s great that the government is trying to level the playing field, but I think the best they could do is put a stop to the practice of the seller paying all commissions. I don’t blame buyers for hiring agents to do work that doesn’t cost them anything therefore they don’t gripe about the exorbitant cost of their service. I would be curious to know, and David feel free to chime in, how many showings it takes on average before a client buys a home. I mean let’s take a bad case of say a hundred showings and say it takes two hours to show one. Now let’s say $30/hr is a reasonable pay to do that (3x minimum wage should be fair considering licensing costs etc.) which would cost $6,000.00. In my case I over paid by 100% assuming worst case. Now if it only takes 50 showings then I over paid by 300%. Something tells me it does not take 50 showings on average to sell a home in Toronto.

    Now don’t get me wrong, I’m all for fair compensation and I’m sure most people still need a full service agent, however since prices are so high the costs need to be brought back in line since compensation is a percentage of the price.

    I did my own work selling and I would have no problem doing my own work buying, come to think of it I did do my own work both when I bought pre-construction a long time ago and recently when I found a place on MLS and called up the agent myself and made a deal.

    1. mortgageJAKE

      at 6:23 pm

      Why are you comparing a family of four who are minimum-wage earners, their yearly salary, to someone who is 100% commissioned? That just boggles the mind.

      Also you’d be stunned at how long the sales cycle is for many agents. I have some clients pre-approved in 2012 and 2013 and still have not bought something. Or, some who see 10 houses per WEEK and don’t buy.

      Anecdotal evidence, for sure, but with the incredibly limited supply we have, open houses are like turnstiles at union station, and listings are shown to anyone within $200K of the asking price up or down because of the appetite to buy right now.

      I don’t disagree with you that you should be able to negotiate the 2.5% on the buy-side. This is the final “set in stone” part of Toronto Real Estate that will change, I think. It already is – look at zoocasa giving a huge cash-back to buyers.

  27. JonB

    at 10:09 am

    David this use to bother me too (to the point of unhealthy stress). I’m not a real estate agent but a marketing consultant for agents across North America who would always ask me how to over come discount agents in getting listings. I finally realized my agents shouldn’t compete on price any ways so people looking to sell cheap are not their ideal prospects or clients. I now teach the agents don’t feel sorry for these sellers. If they want to buy things from a walmart style agent they deserve everything coming to them. I now teach my agents go after prospects who want value and quality and are willing to pay for it. This “You get what you pay for” is not new so these sellers got what they deserved. I wouldn’t worry about that agent because let’s face it the way he conducts business he will not be in business in a few years and if he is it will be part time not closing many transactions.

  28. Gloria

    at 12:58 pm

    Honestly, dont you think discount agents are good for buyers though?! Obviously not for sellers who wants top dollar and I’ve been there done that with discount agents and learned my lesson but what about those looking for a deal here?

  29. Pingback: Real Estate Marketing Gone Wrong: How to avoid this happening to you
  30. Cynthia

    at 12:05 am

    Thank you for this article. I have tried to explain to potential clients the difference between great service and discount service. You have said it quite well! Thanks!

  31. junior

    at 9:29 pm

    I too am annoyed by this but it will take legal intervention which will never happen or the
    big brokers spending some bucks and running some ads to discourage these pirates. (this will never happen also )
    so i guess it will take an act of god to stop this nonsense

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