Big Change Is a Comin!!

Well things in the Real Estate industry were never boring before...BUT NOW - Good drama brewing!

We've got CMHC making changes to your qualifications for mortgage insurance coming as of April 19, 2010 where you used to be loaned to up to 95% of the purchase, you'll now have to qualify on 90%.  (Means less purchase power) Add to that the sudden rate increases.  If you can lock in today - DO IT!

Add to that the HST coming as of July 1st of this year.  Now true you'll only pay HST on new development BUT you're also paying on services now - and guess what?  As a Realtor I'm providing a service and so yes on top of my commission you will be paying HST.  No one is really quite sure how exactly it's all going to play out, but if you write a deal that completes before July 1st, you're in the clear.  You may even be in the clear if the bulk of the deal is done before then but completes after the dead line and there may be a division of how much provincial tax vs federal tax you'll pay.  It's all very complicated. Everyone in the industry have been left with very vague guidelines.  

The really exciting news is the Competition Bureau has taken the Canadian Real Estate Association to Tribunal on charges that we as an industry are a monopoly because of our trademarked MLS system. The new Commissioner seems hell bent on making a name for herself at our industry's expense and making quite ignorant accusations which suggests to me, she doesn't even understand what a Realtor does.

Let me lay it out for you:  You as a consumer has every right to sell your own home.  (Right there I think the case is lost) However, if you want your listing to show up on the MLS (which is Realtor owned/ operated /paid for and controlled through Board data sharing) then you must work with a Realtor as is only right and fair. What's being suggested is that we open up MLS for everyone to freely use.  As it stands, you as the consumer have access to most of our MLS data through our realtor.ca website.  And the Canadian MLS system is the system most envied because all of the Boards across Canada share their information whereas in the American model they each operate independently.  There are something like 900 different boards - imagine trying to sort through it all!  (listen to interesting podcast with Bill Good from CKNW on the subject here: http://www.reincanada.com/Video/TabId/74/VideoId/115/Competition-Bureau-Chall...

Point is  - you've had the luxury of shopping for your properties online with the most accurate data at our expense.  We wanted you to have that because that's the most effective marketing tool we have to bring buyers to our listings.  So essentially we're being scrutinized because our system is so effective.

Here's where I think we're going:  Imagine customizing the different services you would like from a Realtor from a simple upload a listing to the MLS, to marketing properties in different ways (Ie professional photography, floor plans, staging) to negotiating offers and different levels in between. What's really interesting is I think you'll finally understand all the work that Realtors do in earning their commissions.

My partner Ken Hunter and I will be looking closely at possible new business models as we move forward.  Any questions or feedback you have about all the big changes coming up, please leave your comments.  We're very interested in what you have to say!


Posted via email from tlchome's posterous


  1. Great summary of what is going on Teri!
    My question is ... with this new model which I think has a lot of positives for home sellers and good quality listing agents ... what happens to the buyers agent? How does their role and their payment change or does it?

  2. Great question Julie! Truth is the Realtor will still have a fiduciary duty to the Buyer and will likely want to be paid for their services, so we may see a fee being charged to act as their agent. (As it stands now, you know of course that the Listing Realtor pays a portion of their commission to the Buyer Realtor.) I may charge a retainer, much like a lawyer as a base fee for my services.

    The truth is every Realtor has the right to create their own model so it will be interesting to see how we all make it work.

  3. Hi Teri,

    Nice post, but you're mistaken about the mortgage rule changes. The 90% loan to value only applies to re-financing, ie, equity take-outs when renewing your mortgage. Buyers will still be able to borrow up to 95% of the lending value of the home. See: http://www.fin.gc.ca/n10/10-011-eng.asp

  4. Thanks for clarifying Tim. I stand corrected.

    Meanwhile, what is the buzz on your side of the pond re Competition Bureau Tribunal?