Hopefully you guys think I’m a nice guy. Sometimes I like to criticize things that I don’t like. (coughTheSimpleDollarcough) I try to be a nice guy when I do it, probably so people don’t dismiss me as an angry crackpot. Since I’m such a nice guy, I’m going to come up with ways for Canadian real estate agents to survive with the changes coming. You’re welcome.

(Don’t worry, I’m promise this will be the last post for a while about real estate. We’ll move onto something different tomorrow.)

First of all, I’m absolutely convinced discounting is going to grab a slice of the market. Privately, real estate agents will tell you that a lot of their fancy sales techniques don’t really work. Open houses are just a ploy for agents to find buyers. Newspaper ads are just put in to appease the seller. Any moron can put an ad on Craigslist. At the end of the day, buyers start and finish their search on the internet. Flyers to the neighbors? Is that seriously effective? Will your neighbors buy your house?

I’m still not convinced that real estate commissions need to be percentage based. Why can’t agents just charge a flat fee for a listing? I don’t buy the argument that selling a more expensive house costs an agent more. It’s not like the internet or MLS is reserved for regular homes. People looking for luxury homes also look for them online. Why should commission be double for a $600,000 house compared to a $300,000 house? I don’t think anyone buys the agent’s kool-aid on that.

Now how should buyer’s agents be compensated? Could they also be compensated by a flat fee? Or will they continue to get a commission of the sale?

I can picture listing agents offering more individual services. There could be a flat fixed fee for just the MLS listing, along with fees for other specific things. Want the agent to negotiate the deal once it comes in? Sure, that’ll be an extra fee. Want to use their contracts but do the deal yourself? That’s less of a fee. Agents could perhaps even charge homeowners for having agent’s open houses, along with specialty advertising, or all sorts of other things. Rather than giving seller’s the whole gambit of services, the seller can pick and choose what she wants.

What about full service agents? I think what they’ll need to do is ramp up the perks they’re offering. With discounters swarming the market, the days of the agents charging high commissions and low service is over. They’ll still be able to convince people their perks are worth it, there will just be more pressure to deliver. If full service agents want to continue to charge 5%, they’ll need to start investing in virtual tours, paying for their own home stagers, among other things. Some agents already provide extras like this. The others will have to join them if they want to stay in the business.

I’m not sure how this whole thing is going to play out, but let me end this post with a quote from the Executive Vice President of Atlantic Canada and Ontario for Remax, Michael Polzler:

“The fight is over and we lost,” he said. “Let’s implement these reasonable changes, because I don’t think anything they are asking for is outrageous in this age of technology. How can it be unreasonable for consumers to have options? Let’s move on.”

At least someone in the business gets it.

Tell everyone, yo!