Real Estate commissions have been remarkably consistent for years.
Despite threats from the internet and the competition bureau, real estate salespeople have managed to keep their part of each sale.
The Globe and Mail points out one factor that may threaten that income.
In short: rising prices make it easy to just pay the commission, but sellers in a falling market might be a little pickier about how much they are paying to get their property sold. Could bargain shopping and new real estate startup threaten the traditional real estate commission?
John Andrew, a professor at Queen’s University, suggests the following analogy: When the stock market is rising and you’re making money, then you don’t mind paying a broker a fee, but if you lose money on your investment, then the charges will be upsetting.
The market dynamics are changing at a time when new real estate startups, which are largely Internet based, are becoming more innovative. “There is no question that commissions are very high, and there is a big consumer pushback against that,” Mr. Andrew says. “It doesn’t make sense to me that it be a fixed per cent, and perhaps it’s time to begin to look at more of a sliding scale like we have for the land transfer tax, like we have for the income tax.”
Read the full article here.
