Do you really need a real estate agent?
New technology is revolutionizing the real estate industry and making people question if they need an agent who will be paid a large commission.
courtesy Ken LeBlanc
Ken LeBlanc is the owner of PropertyGuys, a franchise real estate listings and marketing service.
Homeowners in a hot market like Vancouver know that selling a house through a realtor means a commission that could easily total $40,000 for a middle class house.
Elsewhere in the country that commission might be closer to $15,000, which is still a lot of money. When you consider the number of mortgage payments that represents, it's an outlay that stings for most.
While the infrastructure required to run a major realty firm is large and expensive, some argue that the huge commission is unjustified. In a hot market, realtors don't have to work as hard to turn over a piece of property, and properties almost sell themselves. As well, come negotiation time, realtors might have little incentive to dicker over a few thousand dollars because it will mean little to their commission.
Revolutionary technology such as the Internet has made it possible for consumers to find alternatives to the traditional real estate agent model. It's a sign of the times that the Competition Bureau settled with the Canadian Real Estate Association to allow more discount realtors into the market, as well as more innovation and technology. The recent news was met with a chorus of cheers from consumers hoping to pay lower fees and commissions, and discount brokers who'd been trying to elbow their way in to a club that didn't want to change.
But the Internet demands change, and the revolution is here, say businessmen like Ken LeBlanc, owner of the franchise real estate listings and marketing service PropertyGuys. LeBlanc is one of many entrepreneurs who are at the forefront of a changing real estate industry landscape.
PropertyGuys, a Moncton, N.B., franchise company, is one of the largest franchises in the industry, with 123 franchisees across Canada and more than 10,000 active listings on its site. Each year, those listings have doubled, says LeBlanc, who started PropertyGuys 11 years ago. Back then, he was a university business student who saw many "for sale by owner" signs around town and decided to create a listings service for them. PropertyGuys does not have access to the Multiple Listings Service, which is estimated to represent 70 per cent of the real estate market. That leaves a remaining 30 per cent of properties being listed and marketed by other means.
"We're not lawyers, but we connect everyone with legal paperwork and the tools necessary," says LeBlanc. "We're not home inspectors, but we know a bunch. We're not mortgage brokers but we know a bunch. We're basically the traffic cop for homeowners."
LeBlanc emphasizes that since they are not licensed realtors, they cannot negotiate between a buyer and purchaser.
"But we have tools that allow people to negotiate online," he adds.
Because PropertyGuys flourishes better in smaller markets, they are only beginning to work their way into Toronto and Vancouver. There are also other, smaller companies that offer similar services in their own regions.
Rudy Nielsen is a former realtor and owner of Landcor Data Corporation, which supplies the most comprehensive real estate data in B.C. by way of quarterly reports to the government, economists, media, financial institutions and realtors. He also owns Niho Land & Cattle Company, and is one of the largest private property owners in B.C. His office is decorated from floor to ceiling with proof of his ranching-related hobbies and his affinity for sportsmanship.
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