I agree, that the ship has sailed, also there is no use locking the barn door AFTER the horse has been stolen,

If memory serves me right, years ago, North American real estate practitioners were compared to their counter-parts in the United Kingdom (England) where the agents fees were so much cheaper.

The reason their rates were so much cheaper at that time, was they didn’t advertise. If a consumer wanted to buy a house they had to make the rounds of visiting the agents in the area of their choice and the agent, pulled a list from his desk drawer to see what they had available. There were no signs posted on the properties either, so the public were forced to attend the “Estate Agents” office for any information.

In North America, it appears that with operating costs that are continually on the rise, and agents that are continuing to offer things for FREE, as lead generators, these agents fail to realize that they are increasing the consumers expectations of things for free, with no value whatsoever being placed upon the agent’s knowledge and time.

One wonders if it isn’t it time that agents begin acting more like true professionals and set a value on their knowledge and time?


IMPORTANT NOTICE: This information is provided as basic educational information by the author and is not a substitute for the advice of an expert and/or the advice of a Lawyer. There is NO representation as to legality, accuracy, correctness of the herein information and the reader is strongly urged to consult a lawyer in the relevant jurisdiction to ensure accuracy before acting on this information.

THE GREATEST THREAT TO REAL ESTATE

As we know it today, is "Consumer Education", with consumers taking more control over their real estate transaction.

Imagine, a consumer listing their property for a flat fee on MLS and adding that it is “Broker Protected” in that they are willing to pay a buyer’s agent 2.5 % of the gross transaction proceeds on completion, together with applicable taxes.

Imagine that, such a seller advising that all offer be made 72 hours irrevocable (for their lawyer to read) and that all deposits to be made by certified cheque within 24 hours of acceptance by the seller, in-trust to the designated stakeholder for both buyer and seller.

Imagine, if complete control of the compensation was removed from the listing broker, and that the listing broker was offered only 2.5% of the gross transaction proceeds and a similar amount on closing, payable to a bonafide buyer’s agent representing the buyer, in a fiduciary relationship and directly from the balance of funds due on completion.

Imagine, that both parties to a transaction must be independently represented in a fiduciary relationship, or they don’t get paid, meaning no more double-ending a transaction, no more permissible conflicts of interest.

Imagine, the buyer’s lawyer holding all funds in trust as stakeholder for both buyer and seller.

Imagine, consumer’s with standard offers of their own, drafted in their best interest by lawyers, and their buyer agents required to present and negotiate the terms of the buyer’s offer or be in breach of their fiduciary duty and thus forfeit their rights to compensation or possibly sued for damages by their principal.

Imagine, buyer’s insisting on a fiduciary relationship only, and the corresponding documents reflect that.

It has been noted, that some buyer’s agents in preparing their buyer’s initial offer, are drafting the offer in the very same way it which they drafted offers as a sub-agent of the seller, and that will probably change after they are successfully sued for a breach of fiduciary duty and damages, plus a complaint being filed against then with the Real Estate Council of Ontario.

You make have noticed that trade associations are in favour of the status quo and have not done much in the way of teaching agents the various deletions and/or amendments to be made to the trade associations current standard forms, when representing a buyer, other than perhaps financial and/or inspection clauses, but not much in the way of specifically buyer weighted clauses that would protect a buyer. Buyer agents are left to learn that on their own.

Unblievable, as it may seen, the time may actually come, when agents may either have to shape-up or ship-out.

IMPORTANT NOTICE: This information is provided as basic educational information by the author and is not a substitute for the advice of an expert and/or the advice of a Lawyer. There is NO representation as to legality, accuracy, correctness of the herein information and the reader is strongly urged to consult a lawyer in the relevant jurisdiction to ensure accuracy before acting on this information

Real Estate Trade Associations

are for the most part reactionaries as opposed to visionaries.

Here is a 2007 vision that was perhaps a head of it's time.

http://realtytimes.com/rtpages/20070525_zillowfuture.htm

Important Notice: This information is provided as basic educational information by the author and is not a substitute for the advice of an expert and/or the advice of a lawyer. There is NO representation as to legality, accuracy, correctness of the herein information and the reader is strongly urged to consult a lawyer in the relevant jurisdiction to ensure accuracy before acting on this information .

It appears that some changes, may already be in the works, as indicated at the following website.

http://www.lawtimesnews.com/201101178183/Headline-News/Lawyers-cashing-in-on-MLS-challenge

This can't be because according to the posters in this thread, there isn't enough money in a transaction to make it worthwhile for a lawyer to get involved and they viturally never are used because no one wants to use them.

Reality is that they are used all the time in transactions where agents are not involved... maybe now more-so with the Canadian law change as consumers get more empowered and educated.

But again - every area is different. Demographics, equity levels and market conditions will dictate the effectiveness of different business models.

It has been said that lawyers do not make enough money with real estate transactions,

but of course each area is different and it appears that in this instance The Real Estate Bar Association of Massachusetts is protecting it's interest with regard to a billion dollar Massachsetts real estate closing industry and has a pendind lawsuit, details at

http://www.massrealestatelawblog.com/201...ued-before-sjc/

The Mass attorneys are suing because

"Massachusetts’ long standing practice is for licensed attorneys to oversee and conduct the residential real estate closing process. NREIS’s business model is to outsource the vast majority of those functions to back office workers who aren't trained attorneys. REBA argues that this practice violates Massachusetts common law and consumer protection statutes requiring that attorneys perform the most vital functions of a real estate closing transaction, such as certifying and analyzing title, preparing the deed, handling the transfer of good funds, where necessary, and conducting the closing."


Well, here in NC we have attorney's handle our closings and it is rare to actually have an attorney involved. The paralegals do most of the paperwork and most of the actual closings including recording the deeds.

Before I was in real estate I bought a lot and built a house on it. Two closings with the same attorney and I never once spoke with him. The dingbat working for him screwed everything up.

So, while our attorneys do not 'outsource' the work, they do not do it themselves.

I just read the article and it seems that the CREA changes are creating an opportunity for lawyers. However, it doesn't seem to be making the process any cheaper for buyers or sellers since all they are doing is paying a lawyer and not a realtor.

Not to mention in this situation the buyer will now need to fork over money for their own lawyer.

Locally most real estate transaction were delegated to a particular legal secretary under the direct supervision of their lawyer employer and with the lawyer personally responsible for any error’s or omissions.

A client is made aware of who has been assigned their transaction and that if they have any questions concerning their transaction that the particularly real estate secretary is available to help them.

Now, all property transfers are done electronically with each lawyer who has been approved and assigned a coded password to utilize the special software required.

What I would foresee, in the event of lawyers becoming more involved is that they will apply their fiduciary duty and due diligence and will modify the standard form of Agreement of Purchase and Sale used locally and which certainly favours the Seller.

In the race for the bottom
"to quote the lowest possible fees"
even the title insurnace companies are having their margins squeezed.

One remark recently overheard was Hey I'm making a hundred per real estate transaction I don't have time to read the status"

yet consumers seem preoccupied only with price.

Continuing Change - Update as of Fri May 27/11

The federal Competition Bureau is taking Canada's largest real estate board (Toronto Real Estate Board) to court in a landmark case that could potentially see cheaper fees for consumers.

The bureau is alleging that TREB is restricting how its agents can provide information from the MLS system to their customers, "thereby denying member agents the ability to provide innovative brokerage services over the Internet."

"TREB's leadership continues to impose anti-competitive restrictions on its members that deny consumer choice and stifle innovation," said Melanie Aitken, Commissioner of Competition, in a statement. "Consumers are demanding a greater selection of service and pricing options."

The full article may be read at the following website:

http://www.moneyville.ca/article/998706--watchdog-sues-toronto-real-estate-board-to-open-mls

FYI:

Bill Johnston, President of TREB is a lawyer, and Lawrence Dale is also a successful litigation lawyer who has sued TREB before.

IMPORTANT NOTICE: This information is provided as basic educational information by the author and is not a substitute for the advice of an expert and/or the advice of a Lawyer. There is NO representation as to legality, accuracy, correctness of the herein information and the reader is strongly urged to consult a lawyer in the relevant jurisdiction to ensure accuracy before acting on this information.