There’s an interesting article in The Star about discount brokers in the real estate business and the impact they may have on the cost of buying and selling.
While other industries, such as travel agents and stock brokerages, have gone the discount route, the real estate industry has largely held steadfast.
Realtors have been successful at holding their commissions at a standard 5 per cent in recent years, although that is already down from 6 per cent a decade or more ago.
But in a market where homes are selling in record numbers and at record prices, some consumers are wondering why commissions are still so high in the real estate business.
They also mention the Competition bureaus investigation of the Canadian Real Estate Association:
The Canadian Competition Bureau, meanwhile, is investigating the Canadian Real Estate Association to see if the CREA’s guidelines discourage discount brokerage houses from using the Multiple Listing Service, which the association owns.
CREA officials say they are simply protecting their trademark.
I’ve noticed a lot of discount broker signs on condos recently, I wonder how much of an impact they are having here in Vancouver. As the article points out – in a hot market it may be easy to sell through a discount broker, but what happens when the market slows?
So what do you think- Are discount brokers the way of the future and would you feel comfortable using them to sell a property in a slower market?