Is it Time to Pop the Hood on Real Estate Commissions?

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What is it about Real Estate that encourages such a firestorm when it comes down to payment for services rendered? Why is it that REALTORS® face such scrutiny for charging commissions? Is it about the amount? Is it about the service? Is it that consumers feel that there is an inequitable gap between value and dollars paid?

Commerce, in its most basic form, comes down to providing a product or service in exchange

for some sort of compensation. In virtually every industry designed for profit, this is a common

practice, easily accepted and done both by consumers and providers of said service.

What is it though, about Real Estate that encourages such a firestorm when it comes down to payment for services rendered? Why is it that REALTORS® face such scrutiny for charging commissions? Is it about the amount? Is it about the service? Is it that consumers feel that there is an inequitable gap between value and dollars paid? Herein may lie the problem. The problem with concept of value in a transaction is that it is subjective and that varies depending on the context. There has been a concerted campaign on behalf of REALTORS® to help to articulate the value that they bring to the table, but perhaps this needs to go further, to help the public both understand the concept of value as it applies to

REALTOR® commissions, and how the mechanics of the industry themselves work.

What Makes Borrowers Tick (And What Ticks Them Off)

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Here is an interesting article I thought I should share.
What Makes Borrowers Tick (And What Ticks Them Off)

New Mortgage Changes

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Since October 2009, the Government of Canada has been systematically tightening mortgage financing regulations for all federally regulated lenders. The changes have been made in order to ensure that Canadians are prepared for higher interest rates in the future by not taking on too much debt, which will improve the stability of Canada's housing market.


On January 17, 2011, Federal Finance Minister Jim Flaherty announced additional changes to the rules for government insured mortgages.

 Three new measures that have been announced are as follows:


New Guidelines – Effective March 18th 2011

1) Lowering the maximum amount consumers can borrow when refinancing their home

This change will lower the maximum mortgage amount for refinances to 85% of the appraised value of the property from the current 90%. This change will help to promote savings in homeownership and ensure that homeowners don’t become overextended by using all the equity they have built up in their home when refinancing.

2) Reducing the maximum amortization period for new government insured (default insured) mortgages

The maximum amortization for all new default insured mortgages will be reduced to 30 years from the current 35 years. This change will help reduce total borrowing costs for consumers, helping them to build up equity more quickly.

As an example, a $300,000 mortgage with a 4.5% interest rate and an amortization of 35 years has a monthly payment of $1412.05 and total interest cost of $293,059.17 over the life of the mortgage. The same mortgage with a 30 year amortization has a monthly payment of $1512.65 but total interest cost reduces to $244,551.49. The difference of roughly $100 a month in monthly payment reduces the interest cost by almost $50,000 over the life of the mortgage.3) Withdrawing government insurance backing on lines of credit secured by homes


Home equity lines of credit generally offer a variable interest rate and often have no repayment terms associated with them, which exposes borrowers to an increase in interest costs should interest rates as expected. Due to an increase in the household debt associated with these loans, the federal government wants to limit the amount of equity for which these loans can be granted

Loans that have repayment terms associated with them will still be eligible for default insurance.

3) Withdrawing government insurance backing on lines of credit secured by homes


Home equity lines of credit generally offer a variable interest rate and often have no repayment terms associated with them, which exposes borrowers to an increase in interest costs should interest rates as expected. Due to an increase in the household debt associated with these loans, the federal government wants to limit the amount of equity for which these loans can be granted

Loans that have repayment terms associated with them will still be eligible for default insurance.

Update on the CREA v Competition Bureau case

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Update on the CREA v Competition Bureau case

Sometimes home ownership isn't all it's cracked up to be - Yourhome.ca

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AARON HARRIS/FOR THE TORONTO STAR

Jenn Miller, left, son Devon Miller and Rachel Giese once owned a home in Leslieville, and although their lives didn't crash or other major misfortune hit them, decided to sell it and rent instead.

Sometimes home ownership isn't all it's cracked up to be
August 13, 2010

David Hayes
Special to the Star

Renting is thought to be a state reserved mainly for those who can’t afford to buy or for those who are young, biding time, squirreling away money until they can afford a down payment. Home ownship, in our culture, is thought to be a one-way street. Who would give it up to return to renting?
Well, in the U.S., a rather large number of people caught up in the sub-prime mortgage meltdown have. But let’s call that involuntary. And here in Canada, according to realtors, quite a few homeowners who sold their homes as the market peaked are now renting while they wait for prices to drop. But let’s call that temporary.
What’s missing is a small but significant cohort of people who make the calculations — massive debt for years to come, property taxes, maintenance and repair costs — and decide to opt out for the sake of lifestyle and mental health.
One such couple is Jenn Miller and Rachel Giese who, with their 7-year-old son, Devon, bailed out of homeownership late last spring and have never been happier.

Interior Design Tips: Home Theatre Decorating Ideas

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A home theatre has quickly become a must-have for practically every family. From the simple family room setup to a much more elaborate theatre-seating wonder, today’s home theatres aren’t just for the wealthy anymore.

The décor of a home theatre will eventually influence how well the room functions as an entertainment space as well as how it shows when the lights are turned on. Creating a functional and beautiful home theatre is easy to do on any budget. Here are some ideas for creating a home theatre for all to enjoy.

Should I pay my REALTOR® less commission?

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The following is my professional informed opinion why you should Not be looking to pay lower commission to your REALTOR®


First off, I want to give you a little inside information about realtors and their motivations. Did you know that statistics show that 20% of realtors make 80% of the money? The average wage for a realtor in Ontario is around $30,000 per year, based on an average 10 deals. So from what I have just told you 80% of realtors are hungry and not doing to well! 20% are doing really well and there is probably a good reason for that, which we will get into later.

             In almost all real estate deals the seller is paying the total commission with the average being 5%,