TREB, Zillow And Home Sales Data

Zillow’s partnership with Century 21 and the Toronto Real Estate Board’s recent loss to the Supreme Court clearly show which way the wind is blowing with regard to real estate home sales data.

The Toronto Real Estate Board (TREB) is being forced to share data on buyer agent commission rates, prior listings, previous sold prices and transactions that haven’t closed.

Zillow’s entry into the Canadian marketplace is sure to raise some eyebrows in Canadian real estate circles. The juggernaut has data on 110 million homes south of the border. Our market is a drop in the bucket by comparison.

But the news about Zillow and TREB won’t change what I do with the exception of providing data to the public at large.

I’m not afraid of greater transparency in my business, in fact I embrace it. I’ve been running a no sign-in-required listings feed since my first days and I publish local monthly housing statistics too. Data certainly helps me do my job but doesn’t play a huge role in getting me business. A consumer armed with the same data I have will hire me for reasons that have nothing at all to do with pricing.

I’m hired for my skill in

  • Marketing
  • Negotiating
  • Writing contracts
  • Communication
  • Collaboration

and knowledge of

  • The local real estate market
  • The listing process
  • The buying process
  • Housing of all types

and because I am

  • Responsive to my clients’ needs
  • Likeable
  • Trustworthy
  • Honest

This is truly the information age and it’s no surprise that greater transparency is coming. The Supreme Court has sided with the Competition Bureau against TREB. Zillow is here now. The public will absolutely benefit and I’m fine with that. Change? Bring it on….

How Do Real Estate Commissions Work?

How Real Estate Commissions Are Paid


On the surface a commission arrangement on a real estate transaction seems pretty simple. But each transaction is unique and like many things the devil is in the details.

So how do real estate commissions work and how do we get paid?

I’ll start with the easy stuff first.

Commission Agreements Between Agents, The Seller And Buyer

The seller pays a commission to the listing agent, who works for the listing brokerage, and to the buying agent and brokerage that buys the property for their client. This commission is determined prior to listing the property.

Because of this arrangement a home buyer typically pays no out of pocket expense for using an agent to buy properties.

Here in Kitchener-Waterloo a buying agent usually gets paid between 2 and 2 ½ percent of the sale price of the property + HST.

The listing agent gets paid anywhere from 1 to 3 percent of the sale price + HST.

An agent working with both buyer and seller is engaging in multiple representation, or double ending as it’s known in the industry. A double ending agent will usually offer a discount on commission in an attempt to make the buyer and seller happy.

Some agents and brokerages will list your property for as little as 1% + HST but these offers more often than not include caveats and exceptions that end up costing you more.

To each his own, but I’m a firm believer in the saying you get what you pay for…

Anyways, the total commission that’s ultimately agreed to is paid out to the listing brokerage upon closing by the seller’s lawyer. The listing brokerage then pays out the buying agent’s commission to the buyer brokerage.

Commission Agreements Between Agents and Their Brokerages

The commissions are further divided depending on the individual arrangements of each brokerage and the agents involved. This is known in the industry as the split…

This is also the complicated bit where the devil is in the details…

At many brokerages the split percentage changes at set intervals based on the volume of business the agent generates, and resets at the end of each year. Depending on where an agent is in the fiscal year they may pay as little as 5% to the brokerage or as much as 35% or more.

Some brokerages only ever take 5% from the agent but have sky high desk fees of over $1,000 a month that the agent pays instead. There are also brokerages with very low splits that have no brick and mortar offices and thus lower business expenses.

If an agent is on a team or got the sale from a referral the commission is divided up even further. The standard referral fee from another agent is 25%, and teams often charge the agent 50% or more.

As an example, a referral that was early in the year netted me only $3,900 on a sale price in the mid 500,000’s. But another more recent transaction at the same price brought me $9,200. And both properties paid my brokerage a 2% commission.

Anyway, that’s how it works. Simple eh?

Waterloo Region House Prices One Year After The Tax


Our local market is doing great despite the turmoil seen in the latter half of 2017. House prices in Kitchener-Waterloo and Cambridge have almost entirely recovered from the aftermath of last spring’s foreign buyers tax. KWAR news release

Waterloo Region house prices one year after the tax are even with the numbers from last spring. However on a city by city basis Waterloo and Kitchener prices are down slightly compared to May 2017 while Cambridge is sharply higher. Regardless the overall trend in valuation has been upward over the last year. In all three cities prices are considerably higher than the lows seen in the last half of 2017.

Waterloo Region house prices one year after the taxPerhaps unsurprisingly our market mirrors the activity seen in the GTA, albeit with lower prices and a stronger recovery. The GTA saw the same sharp falloff in prices after the introduction of the foreign buyers tax. Both markets saw a reduction in volume in combination with a recovery in prices that gained momentum this spring.

Despite the strong recovery here and the more muted one in the GTA it’s unlikely we’ll return to the market conditions of last spring any time soon. There are several factors at play preventing a steep run up in prices. Rising interest rates, the mortgage stress test and modest wage growth are three factors that undermine affordability. This limits the number of people entering the market and also moderates the activity of owners wishing to move up the property ladder.Waterloo Region house prices one year after the tax

These factors are the only thing keeping a check on demand and thus prices. Barring a major recession or a black swan event on the world stage there is little reason to predict lower prices in Waterloo Region any time soon.

Waterloo Region house prices one year after the tax are doing very well indeed. We are still strongly in a sellers’ market. Available housing stock in Waterloo Region sits at two thirds of the 10 year average. Unemployment is low with immigration to the GTA continuing unabated. Locally we’ve certainly seen an uptick in activity from buyers unable to afford the GTA’s high prices. This last point would certainly explain the big uptick in Cambridge prices last month. For city data see my House Prices Page

Rodding For Reading 2018

The sweet smell of unburned hydrocarbons hit my nose and I knew I’d arrived. Rodding For Reading is a classic car show in support of The Literacy Group of Waterloo Region. These old cars brought me right back to my youth when gas was very cheap indeed. The Lead Kings Car Club provided the beautiful machinery. We lucked out with perfect weather and a great turnout.

The Literacy Group provides a number of great programs helping adults improve their skills, such as reading, writing, mathematics or using modern electronics. I volunteer with TLG helping people update their IT skills and really enjoy seeing the progress made by our students. Our volunteer work is free, but the cost of running our programs is not. Rodding For Reading is crucial for raising funds and awareness for the important work done by The Literacy Group.

Here’s a pile of shots from today’s event!

Rodding For Reading

1973 Mustang Convertible

Rodding For Reading

327 in Nova

Rodding For Reading

327 Nova

Continue reading

Buying A New Phone

I’m cranky! Perhaps it’s my age and perhaps my mindset is a holdover from days when product lifetimes were measured in years and decades instead of months.

I had to get a new phone the other day because my old one bricked itself.

I should be happy! Buying a new phone is great, right? Maybe so, and maybe not…

Despite my love for technology I’m not one of those questionable sorts who camp out all night for the latest gadget.

I’m grumbly because dealing with technology is often a pain and the lifespan of today’s products is woefully short.

I come from a generation that fixes stuff. Trying to do anything less is wasteful in my opinion.

So I learned how to reflash my dead Nexus 5, but to no avail.

I’d managed to get the phone and PC connected but the phone refused every attempt at re-flashing the operating system. Since I’m not a coder the learning curve was steep and painful. In the end I wasted a lot of time confirming my phone was dead.

My new Samsung S8 is great but I liked my old phone just fine. Buying a new phone and setting it up was almost as annoying as trying to fix my old phone.

It’d be great if my new phone lasted longer than the three and a half years my Nexus 5 did, but I’m not counting on it. Why can’t we build stuff to last?

Buying A New Phone