Realtors & Buyers’ Agreements

This week, I read an article in the Toronto Star about the exclusive representation agreements that real estate agents try to get new home buyers to sign with them. Agents lock people looking for a new home into an exclusive relationship with them, so that they will have to pay commission to the agent whether or not that agent finds them their new home. Worse, agents are trying to get buyers to sign these agreements in sneaky ways – not explaining the paperwork they’re pushing in front of their clients, and not letting people get out of the deal when they realize with shock what they’ve agreed to.

I blogged about this issue back in November 2010, and it’s still a big issue today.

Luckily our current Commissioner of the Competition Bureau, Melanie Aitken, is here to help. Aitken is a hero for Canada’s consumers, as many articles have noted. Part of the reason this problems is happening is that Aitken opened up access to the MLS to low-commissioned firms and no-fee companies, to give consumers more choice and so that homeowners wouldn’t have to pay high commissions. Aitken eliminated the barrier to entry, made MLS available to everyone, and made it easier for homeowners to sell their own homes. But now the high-fee brokers are trying to keep control of the market. They want to convince you that you need a real estate agent to find your dream home. The Canadian Real Estate Association recently launched an ad campaign that uses humour and fairy tale imagery to keep you in their grip and keep that 6% in their pockets. Since you as a consumer may not want to pay that high commission, real estate agents are now actually coercing people into signing these exclusive relationship agreements. This is manipulative and the type of behaviour that Melanie Aitken is fighting so hard to eliminate.

Next up, Aitken is going after credit card companies, trying to stop them from charging such high interest rates, which are non-competitive, usurious rates. Big changes are coming soon to credit card rules in Canada. Aitken is single handedly spearheading all these initiatives, so big kudos to her, and remember: If you’re considering buying a resale home, beware! Real estate agents are not always acting in your best interests.

1 Comment (+add yours?)

  1. Trackback: Are You A Blindfolded Home Buyer? «

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