Friday, May 27, 2011

Agreement schmagreement

Well, who would have predicted this? Competition Board sues the Toronto Real Estate Board (H/T a simple man). We've known the CREA and its members wouldn't easily give up control of the gravy train without a serious fight, and thankfully the Competition Board seems like a willing and capable combatant.

At the center of this dispute is one undeniable fact: the real estate associations refuse to allow their members to share data in an innovative, open manner. They do this for a variety of "reasons," but I suspect (and have no solid proof to back this suspicion up) that the primary reason is time. When a realtor has to spend time looking after clients, they want to be paid for it. Fair enough, I have no issues with this.

But when a realtor wants to automate the way an individual gets information from them so as to free up time, lower costs and serve more clients, look out! here comes the TREB to "remind" the innovative realtor that only "time" can protect the information of the seller. And that realtor better spend the time faxing, emailing, meeting or speaking on the telephone about the information desired with a client rather than create an online system that offers said information in a manner that competes with the realtors who'd rather spend the time to get the bigger money from the fewer clients.

Would the VREB act this way? Who knows. The most innovative realtor I can think of in this town (regular readers will be familiar with him) isn't offering anything like what was tried in Toronto: he's offering full service listings for a fraction of the cost of the "traditional model," offering cash back to his buyers who are willing to do what most buyers are doing these days anyway (their own house hunts online) and offering a flat fee listing option.

Let me be absolutely clear: I've not communicated with this local realtor on this issue, nor will he necessarily endorse my description of his service offerings (although I hope he provides his own in comments). The VREB can't go after agents who operate in this manner because of the laws around price-fixing, but they don't need to either, because time isn't on these agents side. They still put in some serious hours attending to clients, they just happen to charge less than many of their peers for the same types of services.

If a licensed agent, with the capital necessary to pull it off, wanted to design a website that allowed his clients to log-in, do their own searches and see much of the market-, real property (land)- and house-related data contained in the realtor-only side of the MLS (seller's personal information hidden), then is it reasonable to prevent them from doing this? 

The answer comes down to determining who owns the data. The TREB claims ownership and says they have a "legal and moral obligation" to that data. The Competition Board obviously disputes the legal side of that, but that's exactly why the communications experts over at the TREB chose to include the word moral--they're on the side of the little guys, or so they want you to believe.

I couldn't disagree more. Surely real property data is a key component to the economic public good of a functioning market and shouldn't be controlled by a private self-interest group that claims to have the public's interest in mind? And before you start calling me a raving leftist moonbat please consider the theory of economic freedom first. Finders keepers should be a losers' argument in this battle.

71 comments:

Leo S said...

But we do already have a realtor being innovative in the data field right here in Victoria. JustWaiting mentioned Steve Hanson's site in the previous post.

Property Price Changes.ca lets you access price change data for apparently all properties in Victoria.

Yes it's not the full data, but it's a good start.

HouseHuntVictoria said...

@Leo,

Not at all what I'm talking about. You and I can already do this for ourselves using Matrix or PCS.

What I'm talking about is access to the robust data that is contained within the MLS about properties themselves (sales and price histories, reno permits, zoning changes, convenants, easements etc).

The "innovation" being offered by that agent is purely marketing on a full service commission model only.

Leo S said...

@HHV

That's why I said it's a start.

Also, we can't do this already ourselves, unless you're willing to have dozens of PCS accounts to cover every category, and then somehow scrape those into one coherent database.

I have two PCS accounts for the small segment of the market we are interested in. Both of them have less than 300 properties in them, and from what I've heard that's approaching the limit. I asked the realtor for 500k to 1000k SFH and he said that already overloaded the system and I had to reduce the range. I wrote a script to scrape selling data out of those so I can track it. That works for 2 accounts but many more would be infeasible.

Steve claims they have at least 3000 properties in the database at once That is innovation, at least for the Victoria market. I'm going to see if it's free and if so, sign up. Could be a good source for scraping my data on a wider scale.

Yes it isn't perfect, but this is currently the only innovation going on in this market with respect to data access.

Sweetrealtor said...

I've always been in favour of competitive commissions, and offer this, but that's not the issue with the Competition Bureau this time.

The issue is access to MLS data. MLS is created, funded, and managed by real estate agents. What is wrong by saying the information collected is a REALTOR database, not a public one? How many other companies voluntarily share the information they have collected?

Having said that... Why is days on market withheld from display on realtor.ca?

Zoning info, permit history, etc., can be accessed from the municipality. Some require signed permission from the property owner to release the information.
A copy of the title, which has previous sales transactions, can be obtained from the Land Titles Office.
Do we really need to share the MLS database with you when you already have access to most of the information?

I'm playing Devil's Advocate because it really seems like a non issue, IMHO. This information is already freely offered by any agent who is asked to do a market evaluation on a property.

Not sure what HHV means by "time isn't on these agents side," in reference to those of us who offer attractive commissions.

Marko said...

In the years to come I believe the industry will change; however, it will take a very long time (10 years or more).

I think in 15 years there will be such a variety of business models that people will call me and ask, "Marko, how much do charge, I am looking to buy a home"

My answer will probably be, "$4000 - if the co-op commission is above $4,000 I will rebate anything above and if it is one of those flat fee listings with no co-op fee you will pay me $4000."

Until then I will continue with the cash back system.

In April I did a total of 6 transactions and I certainly was not working 40 hours per week.

May I will finish with only one deal and a few flat fee listings....so not every month is like April.

Going forward I will focus all my time on real estate. IF, that is a big IF, I had enough business where I didn't have to spend time advertising and searching for clients I could probably do 6-8 deals per month without burning out. Technology is my friend. Services such as Sannichs's GIS map system have significantly decreased my workload.

The problem is with 1300 agents in Victoria it is difficult to get to that point. I would be happy averaging 3-4 deals per month, let alone 6.

I think people deserve options. 6% 100k + 3% balance is not the only option when it comes to selling and buying; however, people are very reluctant to change. Most people still think the more you pay the more service you get. Doing alternative business models means taking a lot less on my end but certainly is rewarding whether it be my 2.5% full service, flat fees, or cash back buyers (self promo, duh).

May 26th - flat fee referral

"We are clients of Marko Juras of Fair Reality. We offered him a flat rate fee to put our house on MLS. We were willing to offer the selling realtor a flat fee of $8k. Our house sold (accepted offer) in 4 days. The buyer was not represented by a realtor. It was very easy and straight forward. We got together with our buyer and signed the contract. We took it to our lawyer...he checked over the contract for us for a fee of $100. He will also handle the transfer of funds ($500). Because the buyer didn't have a realtor we didn't have to pay the $8k fee to the selling realtor. That way we were able to go down a little in our asking price and the savings were shared by both seller and buyer.

We would certainly recommend this way of selling a home. He is the best realtor we have ever worked with and we really appreciated his honesty there was no hype. We felt that Marko was telling us the honest facts of what is going on in the current Real Estate market. We had seen another realtor who suggested a much lower asking price, we assume for a quick sale."

May 27th - (Buyer)

"Hi Marko,
Thanks for the document and thanks again for the actual cheque! It will go a long way in helping us build the suite. It was great doing business with you. Not just for the cash back. Because you're knowledgeable, professional, have that 'calm in a storm' demeanor and are warm and thoughtful and kind. Both xxxxx and I think very highly of you and will refer people to you as well as do business with you again."

omc said...

If microsoft didn't allow access to it's code, we would only have programs made by microsoft. No adobe, flash or what ever else. The competition bureau doesn't allow one entity to dominate. There is nothing different with the crea ruling. The realtor's argument is overly simplistic, and just plain childish.

That said, my impression is that the 6% and 3% model is a dying model out here.

Waiting said...

Has anyone looked at this house? I see it is assessed at $580K. Curious about what it is like...

a simple man said...

@Waiting - have not seen it, but pass by it daily. Been up for a week or two. I love the "threat" of only reviewing offers after 5pm Sunday. Works well in a sellers market, but can make you look like a fool in a buyers market. I guess we will see. Or not.

Waiting said...

@asimpleman I figured I would wait and see if it shows up listed after the 29th, or still adverstised at any rate. It seems a high price for a 2 bdrm home on McNeil.
Thanks for the note about the rental on Nottingham. We may look at it, but I would really prefer a 3 bdrm up house. Nice street though!!

Marko said...

"That said, my impression is that the 6% and 3% model is a dying model out here."

Certainly not the case - still going very strong. It will take at least 10 years before we see 6%+3% drop significantly in market share.

DavidL said...

Regarding the "6% and 3% model" ...

10 years ago, the same model was being used and houses were less than 50% of the cost. In 2001, a $250K house sale would net the agent(s) $10.5K while in 2011 a $550K house nets $19.5K.

How could those agents possibly survive 10 years ago on those paltry commissions? ;-)

Watching and waiting said...

Can anyone explain to my why 935 Lodge Ave (MLS # 293198) was active on MLS and my PCS account, showed a pending sale, then all record of suddenly disappears only to reappear as a new listing today at 749k on MLS and usedvic? Did a deal collapse and the listing realtors don't want a record of this or?

Marko said...

The sale (pending) price is entered into the system when conditions are removed; however, a deal can go south between removal of conditions and completion. That could have possibly happened.

HouseHuntVictoria said...

Why the 6%/3% model will likely *never* die: the buyers pay it and don't believe they do. They think they're getting their agent's service for free and the sellers are paying the commission.

HouseHuntVictoria said...

"What is wrong by saying the information collected is a REALTOR database, not a public one? How many other companies voluntarily share the information they have collected?"

There's nothing wrong with this per se. But there is something wrong when one of the realtors wants to be innovative with how he passes this information to his clients and the CREA tells him he can't. That's anti-competitive.

But let's introduce another variable. Realtors have shifted from selling homes to selling investments. No other investment class receives as little oversight from third party regulators. Disclosure becomes a huge issue when you're talking about money. Which is exactly why I introduced the point about economic public good in the main post.

The data contained in the MLS, while collected by the CREA, is an important component of a healthy functioning market. There are plenty of examples of state intervention in these cases to protect the public good. Just because CREA created the monopoly doesn't mean they should be allowed to keep it.

"Not sure what HHV means by "time isn't on these agents side," in reference to those of us who offer attractive commissions."

Time is money. I'm assuming you'd go onto other things if your per hour rate dropped to gas station attendant levels.

If your association created rules to increase the time you must spend on each client, that has the effect of lowering your rate involuntarily--forcing you to raise your rate or eliminating you from the business altogether.

For the past decade, the internet has made the house hunt easier for everyone. I may be over simplifying things, but I'd be willing to bet that the time per client for agents is substantially less than it was 10 years ago. In the same time frame the compensation per deal is likely double because of valuations.

Same goes for operational costs. Internet has reduced advertising and travel related costs.

Thankfully there are agents like you and Marko who are recognizing this and taking advantage of the price competitive opportunities it affords you.

snevac said...

out of curiosity, what's the best place to get a PCS account? I'm currently a lurker here, but likely to be a buyer in the next 12-18 months. Don't really want to be harassed by the Realtor issuing the PCS. :)

Sweetrealtor said...

You can set up your own PCS account at www.fairrealty.com, without anyone hassling you.

omc said...

@waiting,

That price is incredibly high. Many similar houses, lots of little 2 bed war shacks over here, sell in similar shape but in much better locations. A 2 bed house is worth low $600k range on a better street. Again, lots of recent sales to show you what it is worth.

This is where a decent realtor comes in; they would tell you it is overpriced, or show you recent sales. The seller is hoping for that "one buyer" who is, to put it plainly, a moron. when I used to be in construction we would see some real doozies once in a while. They were always out of town retirees it seemed. note, I am not calling out of town retirees morons.

Alexandrahere said...

My pcs account for SFH is showing above average sales for the second week in a row. And Average/Med sale prices aren't going down either. I don't know why this is. Mind boggling really. My price range is $375K - $775K in the four core municipalities. Condo/townhouses aren't faring as well in terms of sales volumes although not seeing any great decreases in prices and Avg. & Med sales prices have seemed to stabilized over the past few weeks. Any others here seeing this?

omc said...

My PCS isn't showing this. Is it mainly the low end that is going? My impression is that fernwood "beauties" and gordon head basement homes were still over heated.

Leo S said...

Do we really need to share the MLS database with you when you already have access to most of the information?

I have to agree with Sweetrealtor here. Why is it the CREA's responsibility to open up their database to the public? They collected it, they fund it, they can control it. Of course I would love to see it opened up, but I don't think we have the right to access a privately compiled database.

The responsibility rests on the municipalities. If anything, we should pressure them to make data access easier and automated.

HouseHuntVictoria said...

@LeoS,

Why shouldn't transactions in an open marketplace vital to the economy of Canada and beyond be a matter of public record?

The TSX functions like this. So does the Nasdaq and the Dow. Why should the CREA be allowed to hoard market information simply because they started collecting it first? Note that I've never said they shouldn't be compensated for collecting the data if they're forced to open it up.

Furthermore... and the heart of the anti-competitive matter here, why should they be allowed to prevent a member of their organization from making that information available to their clients in any manner of their choosing?

If Google wanted to hire Marko simply because he's a member of the VREB and a licensed REALTOR for no other purpose than to scrub the data available to Marko and make it available to anyone who wants to "be Marko's client" behind a password protected area, why shouldn't they be allowed to do this?

Sweetrealtor said...

Again, playing Devil's Advocate to inspire great debate...

If we are entitled to access any organizations database, I should be able to go to any school and ask how many kids are failing, how many were expelled, when, and why? Or if I want to move to a neighbourhood, I should be able to go to the RCMP and find out how many break-ins, vandalisms, domestic violence disturbances, etc., have taken places in that neighborhood.

It seems to me there is a sense of entitlement when the public says "give me all your data because I want it."

Leo S said...

Looks like a normal sales week to me. Last week SFHs 550 to 900 there were 35 sales. So far we're at 16.
Under 550k there were 11 which is also par for the course there.

Leo S said...

Why shouldn't transactions in an open marketplace vital to the economy of Canada and beyond be a matter of public record?

We can just as easily as why it should be? What about other things that are bought and sold? Should we have access to sale prices, price changes, claim history of all vehicles on the market as well? BBQs? Diapers?
Obviously I'm all for openness, and for myself opening up the data will be a positive move, but I don't think we necessarily have a right to demand it from the CREA. Like I said, that data should come from the city.

Furthermore... and the heart of the anti-competitive matter here, why should they be allowed to prevent a member of their organization from making that information available to their clients in any manner of their choosing?

Plenty of professional organizations have rules about sharing privileged data that members have access to.
If the CREA funds the collection and organization of that data, it is perfectly reasonable that they should be allowed to protect their copy of it.

How exactly is it reasonable or fair if one realtor made a deal with Google to funnel data out, and all the profits from that went to one person rather than the agency that funds the data?

HouseHuntVictoria said...

@SweetRealtor,

You can do many of the things you just suggested. The City of Calgary police department has map-based crime statistics and incidents rates. The Fraser Institute compiles school results annually based on public data.

Open Data is a movement that is becoming more and more prevalent.

Furthermore, I dispute that simply because CREA collects the data that they own it. That's the point. Until someone makes a reasonable argument beyond "finders keepers" I'll keep the discussion going.

And I'll point out that few people are actually discussing the real issues I've questioned here. No one is making the argument that the CREA should have to open their database. But the CREA should not be able to prevent its members from sharing the data in any manner they choose with their clients.

HouseHuntVictoria said...

@LeoS,

The data collected by the CREA within the MLS is different than sales data related to BBQs, cars and consumable goods because its an investment class.

Please understand that I'm not arguing the CREA should have to turn over their database. I'm simply saying that if an agent wants to build a website that allows you and I to privately access more information that they freely discuss in meetings, over the phone and e-mail, then their member associations shouldn't be allowed to prevent them from doing so. That's anti-competitive behaviour and the Competition Bureau is going after them for that.

The data that the MLS database holds is different than many other professional data sets. It shouldn't be compared to a great many of those for the same reason as you wouldn't compare buying a house to buying diapers.

Ask yourself why there's competition between service providers for other investment classes. It's because they all have access to the same data sets, administered by arms-length third parties, under strictly legislated disclosure requirements, because it's been deemed to be a part of the economic public good of a functioning Canadian investment marketplace.

As soon as a single realtor uttered the word "investment" they stopped being a commissioned salesperson of a consumable good (shelter) and started becoming an "investment advisor" who, IMO, should have to comply and operate in the same manner as a mutual fund sales person or other investment broker, under similar structures that require data to be held and shared in a manner so as to make investor/homeowner protection the primary outcome.

Leo S said...

Furthermore, I dispute that simply because CREA collects the data that they own it. Until someone makes a reasonable argument beyond "finders keepers" I'll keep the discussion going.

They do own that particular representation of the data. No one is stopping anyone else from collecting the same data by going to the same sources. If the CREA were claiming that no one can set up a competing database of similar data that would be a different story.

I'm simply saying that if an agent wants to build a website that allows you and I to privately access more information that they freely discuss in meetings, over the phone and e-mail, then their member associations shouldn't be allowed to prevent them from doing so.

And I'm saying that's a backwards way of going about it. If the Canadian regulators decide that the information should be open, then the CREA should open it in an organized fashion. Having individual opportunistic realtors profit off the work of someone else is not the right way to approach it. The only purpose to that is to trigger court cases like that being discussed, and there it has done its job.

Leo S said...

As soon as a single realtor uttered the word "investment" they stopped being a commissioned salesperson of a consumable good (shelter) and started becoming an "investment advisor"

How about this dude? Should he be classified as an investment advisor because he described the Mercury as a super investment?

Alexandrahere said...

LeoS: so far this week for sfh min 2 beds 2 baths up to $775K in the areas of Victoria, Oak Bay, Esquimalt, Saanich East and Saanich West, I have 26 Sales; last week I had 28 sales. Avg selling price for these is currently at approx 584K.

HouseHuntVictoria said...

@LeoS, I remain unconvinced by your points.

I'd suggest, if you haven't already, reading the two links at the bottom of my main post about economic public good and economic freedom.

If you want to continue this discussion on a theoretical level I'm game, but I fail to see why or how the miniscule collectibles investment market should be compared to an investment marketplace that 70% of Canadians participate in. Or diapers etc...

Jason said...

I think i side with Leo and sweetrealtor on most of this argument. But this is not about playing nice in the sandbox and sharing your proprietary toys.

There was nothing overtly wrong, in a legal sense, with microsoft or standard oil's business either. Simply put, this is about busting a monopoly and opening it to unfettered competition.

And while it might be argued that there are plenty of companies and therefore lots of competition in real estate, i'd say that when such a a huge percentage of sales involve MLS and there is such obvious collusion between all realtors (until recent years) regarding the commission structure, this industry's control of MLS creates a monopoly. I'm not sure if this is (was) because of rules imposed by the crea, or simply RE company's reluctance to rock the boat. Either way, it's clearly time for somebody bigger to step in and shake things up here.

JWJ said...

Crime data for Victoria is available from http://vicpd.ca/ - just click on the CrimeReports banner.

Leo S said...

I fail to see why or how the miniscule collectibles investment market should be compared to an investment marketplace that 70% of Canadians participate in.

The point is that just because some salesman tells you something is a good investment does not mean they should be classified as an investment advisor.

You're saying that houses are an investment class and should be regulated as such, and I don't agree. For sure some people see their house(s) primarily as an investment, but for the vast majority their house is primarily shelter, and the price appreciation is a happy side effect.

So yes, my comparison to cars and diapers is tenuous, just like your comparison to stocks and bonds. Real estate is a bit of both.

Leo S said...

it's clearly time for somebody bigger to step in and shake things up here.

Agreed on that one for sure.

jesse said...

I find it interesting that an association that stalwartly defends privacy issues provides little in the way of limitations when members access the data and distribute these data to whomever might make them money.

They cannot have it both ways. Either ensure privacy or open the books. This is another hammer on the wedge that we predicted last year. It's only a matter of time now, save political interference.

a simple man said...

What has me shocked is that despite having all this information at their fingertips, the buyers realtor for the recent sale in Meadow allowed them to bid $41,000 over a previously offered price.

Perhaps there were improvements that occurred that I did not know about, but I am sure this would have been touted in the listing loudly. Or perhaps the realtor let the buyers know they were overbidding on a property that was on the market for almost a year. Or perhaps there was a sudden bidding war. Or maybe the buyers just felt bad for the folks who had bought another home already and were in a bind and decided to award them with a $41,000 bonus for the stress they endured.

Any way you look at it, someone didn't earn their commission - rather, they were a liability. Had the buyer come here we would have given them much better info for free.

a simple man said...

Our maybe it was just dual-agency.

Marko said...

314 - 1375 Bear Mountain Pkw listed at $319,900 a few days ago...and paid 517k 4 years ago........that sucks.

Mindset said...

Is it just me, or are there real estate signs everywhere again? It has that 2008 feel to it out there again.

As a completely subjective drive-by observation from the streets, it also looks like quite a few rental properties are being put up. This led me to wonder if the opportunistic RE investors are cashing out now that the murmurs of a market downturn are getting louder?

Have any of the realtors that follow this blog noticed an increased trend of people either selling or interested in selling their investment properties? Or is a lot of this new supply owner/occupiers? Or even better, is this statistic available anywhere?

How about people buying investment properties, any trend indications on how many people are buying properties for investment purposes?

Sudden Valley said...

Times are tough. Will we see more real estate services offering discounts?

The Stage Coach
http://on.fb.me/kihr28

"For those of us that work in or are support to the Real Estateindustry we have a reverse market to what we have been used to in Victoria for a few years. Currently the stats show that there are over 4500 homes on the market, condo prices have come down and sales are down 36%.If you are not an optimist these can be daunting stats. In all reality people will still be buying homes and living in one of the most beautiful cities in the world. Real Estate will always sell for a good price.For homeowners selling and Realtors working with them on the sale of their home it is a task of setting the home apart from all of the rest.I believe so strongly that staging can help set a home apart and potentially sell it in a shorter period of time for top dollar that for the month of August I am offering a 30% discount on my Occupied Home Full Consultation fee. I am doing this because I love what I do and I know I can help people with the sale of their home.I look forward to you taking me up on my offer."

Sudden Valley said...

Looks like Slegg is getting into the real estate biz.

Sudden Valley said...

CMHC Approved Peasant Mansion

Sudden Valley said...

LinkedIn Answers "Why is Vancouver's housing market so out-of-kilter and why don't people see it to be a bubble waiting to burst? " "What's fueling it?"

Answer.. "price of homes in the Vancouver area is being fueled by mainland Chinese buying investment properties in Vancouver"

Then the correct response. "In fact less that 1% of all GVRD properties were bought by non-resident Asians".

Good thing we have people sharing facts to correct these urban myths.

LinkedIn Answers - Housing bubble in Vancouver, Canada

Sudden Valley said...

20 shocking US Housing Market Stats. Wow!

patriotz said...

You're saying that houses are an investment class and should be regulated as such, and I don't agree. For sure some people see their house(s) primarily as an investment, but for the vast majority their house is primarily shelter, and the price appreciation is a happy side effect.

First of all, someone who buys a house simply for shelter is treating it as an investment. An investment is any asset which is expected to provide a marketable future value (e.g. a place to live). Not just "something I think I can sell for more than I paid for it". You are confusing investment with speculation.

A GIC doesn't have price appreciation does it? What does the "I" stand for?

Secondly and more importantly, the financial system and the government regard housing as an investment, as they lend huge sums of money over the long term to people to purchase it - much more than for the stock market. And when the housing market gets into trouble, they get into trouble. That's the biggest reason to make the housing market more transparent.

Leo S said...

An investment is any asset which is expected to provide a marketable future value (e.g. a place to live).

That's not the definition. By that definition any consumer good is an investment (your iPod also has a marketable future value).

Maybe you mean that an investment is any asset which is expected to provide a future gain.

Anyway, the point is more or less moot and we're arguing semantics.
I'm all for increased transparency, just not for allowing individual realtors to be parasites on the back of a communally acquired resource. If it's going to be opened up it should be done in an orderly manner.

a simple man said...

Anyone with weekly totals?

Marko said...

Monday, May 30, 2011 8:30am:

MTD May
2011 2010
Net Unconditional Sales: 527 695
New Listings: 1,381 1,621
Active Listings: 4,666 4,521

Please Note

•Left Column: stats so far this month
•Right Column: stats for the entire month from last year

EatMe said...

All of this "proprietary" information is available through our govt. agencies which have ceded the easy compiled access through the Realtor. The easiest way for them to break the monopoly is to make all of this information (and more) easily available - sale history, assessed value, permitted work, etc.

Has anyone looked at the sh*t data compiled by the Realtors? The data is entered by dopey Realtors and is full of errors. Better than the alternatives I guess...

omc said...

These #s are lower than I expected. They are in line with what has been happening in the market as a whole this year though; if you don't price right it doesn't sell.

I don't know if i should bother with eat me's comment; I think he enjoys raising hackles. Sure a great many realtors fall into the "selling mutual funds last week, pumping gas next week" group, but some of the successful ones I have met are actually quite bright. I wouldn't want to trade jobs with them though.

I used to have alot of resentment towards realtors, but the changes to the system already have calmed that. How much will guys like Marko list your house for? It seems pretty fair to me.

EatMe said...

Re: dopey Realtors

I didn't say all Realtors were dopey but the dopey ones get to enter data too! If you look at the raw data (realtor's view) it's riddled with errors.

JustWaiting said...

Lets take a closer look at the weekly stats VREB has released for May. (+xxx) denotes change from previous week.

May 30 (4 day work week)
- Pending sales 527 (+112)
- New listings 1381 (+274)
- Active listings 4666 (+67)

May 24
- Pending sales 415 (+161)
- New listings 1107 (+336)
- Active listings 4599 (+56)

May 16
- Pending sales 254 (+126)
- New listings 771 (+375)
- Active listings 4543 (+126)

May 9
- Pending sales 128
- New listings 396
- Active listings 4417

The sales/new listings ratio for May is 527/1381 or 38% which is a sign of a buyers market (below 40%).

Sales have averaged about 27 per business day so we can expect around 581 from VREB on Wednesday. This is close to last month's 574 but way down from previous years.

2010 - 695
2009 - 879
2008 - 770
2007 - 963
2006 - 909

You can expect the usual "stable and balanced" market nonsense from VREB and their parrot the TC on Wednesday. Any comparison to last year will say that 2010 was unusually high etc. No mention will be made of the last 5 years.

omc said...

Good analysis justwaiting. I believe the MOI also points to a buyers market. I was talking to one of the bigger agents in town and he saw nothing out of ordinary for the small surge we saw in sales about a week ago. It was just the reaction to the surge of new listing we got a few weeks ago; the better priced ones sold (except for the idiot who bought meadow of course). We are still trending lower in sales, which points to a modest correction later this year.

Houses will get less fashionable to buy, and then the interest rates will rise. What point this will happen in 2012 I don't know, but things will get interesting.

Sweetrealtor said...

Enjoying the debate. I agree with Leo S on many points wrt CREA information. If the information is to be made public, one agent cannot be the one to benefit from this breakthrough.

When I first started www.sweethomevictoria.com, I received a call from the Victoria real estate board days later telling me I was breaking the rules. The custom format from the website designer had a MLS search engine on it. VREB did not allow access to other agent's MLS listings from a website in this way and I had to remove it. (I think they've relaxed this stance now but that is not the point.) Our organizations and boards are in charge of regulating the use of MLS data by their agents and I'm ok with that.

Not sure how someone found out about an previous offer on Meadow being 41k lower. That's confidential information between the seller and his agent. I never talk about offer history to buyers or their agents. This is where having an agent to protect your information is most valuable.

Regardless, don't blame the agent for the buyers pricing. I don't tell my buyers what to offer, I educate them so they are comfortable with what they offer. Same with my sellers, I educate them and tell them my suggestion for a price. If they choose to list at a higher price, I will take the listing anyway (most of the time - unless they are completely out to lunch).

Alexandrahere said...

Hi all here are my stats for the week of 23 May - 29 May.

SFH min 2 beds & 2 baths priced between $375K and $775K in the areas of Victoria, Oak Bay, Esquimalt, Saanich East and Saanich West.

New: 41
Sold: 26
P/C: 23
OM: 15

Avg Selling Price: $590K
Med Selling Price: $589K

8 out of the 26 sales went for under BC Assessment & 10 of houses sold had reported suites.

Townhouses and Apt Condos

Min 2 beds & 2 baths, priced between $250K and 580K in most areas of Victoria (not downtown), all areas of Esquimalt and Oak Bay, most areas of Saanich East and Gorge, Tillicum and Burnside of Saanich West.

New: 21
Sold: 6 apts & one townhouses

Avg condo selling price: $363K
Med condo selling price: $345K

The townhouse sold for $405K

None of the condos went for below assessment.

a simple man said...

hi sweetrealtor: the prior listing was $41K lower, not an offer.

Sweetrealtor said...

Ok. Gotcha.

Im always surprised when agents miss previous listings. It should be part of the analysis/information provided to buyers before they offer.

pod_x said...

@sweetrealtor

Regardless, don't blame the agent for the buyers pricing. I don't tell my buyers what to offer, I educate them so they are comfortable with what they offer. Same with my sellers, I educate them and tell them my suggestion for a price.

But... shouldn't you? Isn't that one of the few value added services realtors offer, valuations and pricing? Anyone can get MLS listings, go to open houses, and fill out an offer. I know you don't dictate what a buyer should offer or seller list at, but how can you say you don't tell your clients what they should offer?

Sweetrealtor said...

They often ask what to offer and we'll chat it out, yes. Then I will do a market evaluation - looking at the sale/listing history and comparable sales. In the end, my clients should feel that they made the decision on the listing or purchase price. That's how I run my business. I don't want some disgruntled client (rare) to have resentment about offering or listing at a price I suggest.

With offers, I do everything I can to get the price down. I just closed a deal where I grabbed a vermiculite sample on day 1 of the offer, knowing it likely had asbestos and would take days to get analyzed. It tested positive and I got the price down. You're paying for my expertise, which I share with you. Suggesting a price is just part of it. And it is just that, a suggestion.

Agents cancel and re-list properties because it does fool some people - resetting the days on market, etc. It shouldn't fool the agents though.

DavidL said...

A good backgrounder from CBC about about issues that need to be considered with tomorrows (possible) interest rate adjustment announcement:

Mark Carney's balancing act
To raise or not to raise (interest rates, that is)

JustWaiting said...

A local agent that used to visit this board wrote a blog piece today that shows the months-of-inventory (MOI) for single family homes (SFH), condos and townhouses for the period May 1-30. Readers should find it interesting.

Greater Victoria Real Estate Absorption Rates

Here are some of his MOI stats:
SFH - 5.9
Townhouses & Duplexes - 7.9
Condos - 10.5

These numbers are not good when we are in the peak selling season. I wouldn't want to be trying to unload my condo right now.

From June onward sales start drifting lower until December when the cycle starts all over again. We have a very high level of inventory this year and that may continue to climb for the next few months as some owners rush to the exits.

Time will tell....

Fiduciary said...

JustWaiting, thanks for the stats. I took a look at the link though, and the commentary over there was just way too "spun" for my liking, and I could pick out the google search words...

I recently gave a speech where one of the main points was to think critically about advice; primarily how the advice you're hearing benefits the person giving it. That's why I'm a numbers person - the closer you get to the source data the more bias and spin you remove. I suppose that could tie in to the previous discussion about the VREB's data openness, but I won't go there...

JustWaiting said...

Fiduciary,

Thanks for the feedback. Yes the fellow writing the blog has a strong marketing pitch and one has to focus only on the numbers he presents. However, I have found all his stats to be pretty accurate (unlike some other agents like the infamous Fred C. that posted here a while back).

EagerBuyer said...

Tom and Mary walk into their friendly mortgage brokers to arrange a mortgage. The smiling broker gets them what appears to be a good deal. Over coffee they mention that they are going to be a little tight for cash and really would like those stainless steel appliances.

No problem the broker says. I can help you get a new Visa or Mastercard from one of my banking contacts. A few weeks later the card arrives in the mail. Mary tells Tom that it sure is great to have a friend in the mortgage business.

Can this really happen? You bet!!

Click here for news report

“As we continue to look at supporting the brokerage community by offering new products and services, we are pleased to announce that in the coming week, National Bank Broker Services will be launching the ability for brokers to offer our Mastercard products to their client base and brokers will be compensated for this,” Mark Squire, director of broker service

EagerBuyer said...

Banks really want your business! Financial Post reports:

In a slowing market, banks fight over mortgages

Faced with slower loan volumes and an uncertain global economy, the Canadian banks are fighting tooth and nail for growth, especially in residential mortgages, the largest single asset class on bank balance sheets.

Competition has become so intense in some cases that lenders are offering home loans at break-even rates just for the sake of gaining market share.

Not only are lenders incenting brokers and agents, they’re also “adjusting” some of their conventional mortgage products to make them more appealing to home buyers, for instance by extending the amortization period to as much as 40 years when the buyer can make a significant down payment.

Marko said...

My job would be so much easier if the public had access to the data I have access to. I spend a great deal of time emailing documents to people they don't have access to...previous sales history, comparables, sales, etc.

Unfortunately I have to charge for my time via my rates.

I agree on Kevin's point about the asbestos. That is what hiring a REALTOR® should be all about. Hire someone who actually knows something about homes.

Fiduciary said...

Marko and SweetRealtor make a great point in my opinion: you're paying for someone's expertise and time. This is why I'm always more comfortable paying someone a fixed rate per hour, because it lets me put a price on their advice that isn't related to my outcome. That way, when I hire a professional he or she will have a vested interest in my outcome indirectly via repeat business, recommendations, etc., as opposed to a direct interest via selling price.

The way our system is set up now, buying agents get paid more to do a poor job (ie higher selling price), which just seems so backwards to me. It's incenting them the wrong way! If we could pay agents hourly, more people would probably do what Marko is trying to get them to do with his cash back: put their own time & effort into the search instead of relying on a realtor to do all the searching for them.

Disclaimer: I'm new at all this, so please correct my facts if they're off-base.

Leo S said...

@Fiduciary

Of course, if you're a seller, paying a realtor by the hour might also be a disincentive for getting a sale done quickly..
However I would prefer that model as well. Have an hourly rate and be done with it. Might also encourage the listing prices to be more realistic, with fewer people "testing" the market just to see what kind of price they can get.

As for the Pfanns and their cutesy rhetoric... Let's just say never trust anyone that uses Comic Sans in their presentations.

pod_x said...

Buying and selling houses are two different things. The more I think about it, the less a % based commission makes sense for the buyers. A fixed or hourly rate would incentivize buyers to do more research on their own, instead of using the agent as a glorified taxi service.

The agents then could spend more time becoming experts at what they do: helping buyers evaluate specific properties they are interested in. (Of course, nothing would prevent buyers services existing that just filter listings; that can be a quite a task for people who are out of town or do not have very much spare time.)

The seller's side is different. A % commission makes more sense; it rewards getting a higher sale price, but also gives an incentive to move property quickly with as few expenses (staging, advertising, etc) as possible, which may not get the best price. The difference in commission between a sale at $600k and $625k for example is fairly small, but that's $25k less in the seller's pocket, while freeing up the agent to move on to another deal.

I don't really know how incentives could be structured to better protect sellers' interests.

Sweetrealtor said...

You have to realize the percentage/incentive argument doesn't work. For example, getting $50,000 more or less on the purchase price only changes an agent's commission by $750, based on the 3%1st100k&1.5%balance structure.

I'm all for changing the system. Hourly won't work. I get calls at 8 a.m. about properties, and at 8pm, 9pm, weekends, holidays, and so on... I just spent 20 minutes last night trying to get hold of an elderly agent who wanted to cancel an appointment. He could have texted me or just left a message but for some reason, old ways, he wanted to speak to me personally. 20 minutes of my time to cancel a viewing that could have been dealt with in 1 minute.

Some properties sell quickly, some take months and months, or years. Some don't sell at all and we have to accept the loss of time and costs.

I've been offering reduced listing commission upon signing, further reductions if you get an accepted offer in 2 weeks, and drastic reductions of the buying agent commission if I find the buyer. I think this covers the bases of most sellers' issues with quick sales and double end windfalls. To go at this further and charge by the hour, week, or month, gets too complicated.