Real estate agents across the province are being urged to forget about hosting open houses while the Coronavirus threat escalates. The Ontario Real Estate

What are the dirtiest secrets of the real estate industry?

There are so many… Before I get started, remember, Realtors in almost every state hold themselves out as fiduciaries. That’s the highest level of representation under the law. They pledge to represent your best interests above all others, ESPECIALLY their own. Now, look at what they really do. Not in any particular order:

  1. Ambushing buyers. A DIY buyer wants to save on commissions and decides to do all the work herself and go to open houses and set up appointments with listing agents. The plan is to a hire an attorney to do the negotiating. Realtors love to ambush these “savvy” buyers. As soon as the buyer has expressed some interest in the home, the listing agent will pounce and lay claim to the entire commission. No warning is given to the buyer. But the buyer loses her right to get her own representation and negotiate the commission.
  2. The Big Bait and Switch. Agents are always talking about how important it is to have a buyer agent representing them. But you know what? Few ever provide that representation. In fact, most buyer agents don’t want to represent you. They want you to buy one of their in-house listings so that they can get more commission money. And you what happens then? All the reasons for which you hired that agent go out the window. When dual agency arises it is illegal for the broker to help you negotiate or advocate in any way that might be detrimental to the other party.
  3. They Do So Much Work (no they don’t). To prove my point, I provide home buying and selling services to my clients. I am a reluctant member of the MLS (I don’t agree with anything they do) in order to provide commission savings to my clients. It’s easy. It’s soooo easy. All the so-called Realtor “value propositions” are not there. Few listing agents even measure houses and as a result, most MLS listings have inaccurate square footage. You don’t need a Realtor to tell you how to prepare a house to sell – there are hundreds of articles on the topic. You don’t need a Realtor to tell you the price range of your house. Realtors aren’t appraisers and they often manipulate the values to get the listings. Use an appraiser. Staging a house? There are tons of staging companies. There are tons of real estate photographers – just google it. Showing houses is completely automated through a texting system that automatically texts the seller. Negotiating the deal? I am a consumer lawyer who routinely represents consumers who have had severe problems with the so-called negotiating expertise of their Realtors. Realtors are not trained to freehand draft contract clauses and few are any good at it. Many, many contracts are voidable and only close because both parties want the deal to go through…
  4. Open Houses are Good for Realtors (not sellers or buyers). Open houses rarely sell houses. Even the Realtor statistics show this, but they conflate the stat with real estate signs stats. It’s somewhere less than 5%. Realtors make you clean your house and then use it as a platform to find other buyers and sellers. It’s also a huge security risk for sellers. What better way to scope out a house to burglarize later…
  5. Their fees are outrageous. I don’t care how many times they split their fees – their fees are just stupidly high and the result of NO competition. Especially when you take into account that on the buy-side of transactions nearly all of them just collect whatever the seller broker is offering. Stop allowing listing brokers to offer commissions to buyer brokers and commissions will halve. If buyers want to hire a buyer broker they can. Or perhaps they might hire an attorney for far less… Not a bad idea when you consider that you don’t even need a high school education to get a real estate license in most states and the total training is typically 90 hours or less. You will get far more expertise with an attorney…

There’s so much more. This industry is the most unregulated industry in the nation. And the regulations that they do have are self-written to protect themselves from consumers. NAR is the most powerful industry lobby group in the nation and they routinely flex their political muscle by writing their own laws and appointing Realtors as legislators and regulators. In the last election, they claim that over 95% of the candidates they backed got elected. They are the biggest newspaper advertiser and few local news organizations will ever write a negative story about Realtors. Realtors own our country and are the biggest source of equity stripping to ever harm consumers.