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After a number of real estate agents could not give me an answer, I did a little research to come up with an answer.

From the graphs below it appears that The Canadian Real Estate Association (CREA) through their MLS agents is price setting Canadian real estate based on the stock market prices and trends.

"The Canadian Real Estate Association (CREA) is one of Canada's largest single-industry trade associations, representing more than 100,000 real estate Brokers/agents and sales people working through more than 100 real estate Boards and Associations." These brokers/agents and sales people are paying out more than $1,500,000,000 in yearly fees to CREA/MLS and the brokerage firms. "CREA owns the MLS® and REALTOR® trademarks" The US trademark REALTOR® is held by US NATIONAL ASSOCIATION OF REALTORS.  The Canadian trademark REALTOR® is held by US NATIONAL ASSOCIATION OF REALTORS and Realtor Canada Inc. For fifty years, MLS (Multiple Listing Service) has maintained its monopoly. The federal Competition Bureau has an open file look­ing into whether the MLS system has rules that violate the Competition Act.

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Caution for 2nd half of
Oct and Nov 2011

GDP growth rate

Likelihood to sell privately in the future is significantly higher in Atlantic Canada and Quebec compared with other provinces:

    Atlantic provinces           - 48 per cent

    Quebec                         - 39 per cent

    Manitoba/Saskatchewan - 32 per cent

    Alberta                          - 29 per cent

    British Columbia             - 22 per cent

    Ontario                          - 21 per cent

CREA - News

RECO - Complaints against agents & brokers

“Our concern is that [CREA] are improperly and unlawfully leveraging [their control over MLS] in order to impose these restrictions and to deny competitive forces and to deny good old-fashioned market competition,” said Competition Commissioner Melanie Aitken. “This case is focused pure and simple: Let consumers have the choice, let agents have the opportunity to satisfy and serve those choices.”

One of the largest single bills you will ever pay is the real estate fee for selling your home. A typical house that sells for $350,000 at 5% + HST commission will cost you $19,775. For this money you would expect to have highly educated professionals working for you. The fact is it is one of the easiest, cheapest and fastest professions to obtain. Only a secondary education is required and a few weeks of courses  (Similar requirements as minimum wage call centre jobs). The vast majority never complete the course and up to 90% are out of the business within 6 months. Agents do not get paid until they sell a house and they have to pay out fees in excess of $15,000 yearly to CREA/MLS and their brokerage firm. If you use an agent make sure you do a recommendation check first and it is their full time job. Most agents today just want the listing as they still get half of the 5% commission when another agent actually sells the house. There is a glut of part time real estate agents looking for the quick buck. Beware that many agents will try to convince you to keep dropping your price until its sold even though they convinced you the initial asking price was fair market value when they got the listing. Although a closely guarded secret, real estate agents average salary works out to $55,000 a year in Toronto; $52,000 in Vancouver; $46,000 in Calgary; and $27,400 in Montreal in 2002 versus $37,000 national average in the US in 2010. (About the same as a used car salesman). If your house does not get sold during the period of the listing beware of the holdover clause if you try to sell it yourself after the listing expires. It is typically 60 to 120 days. Make sure you get the minumum before you sign the listing. Your agent will proably not even mention it.

Sellers Beware: Buyers usually request 5 to 10 working days grace period for financing approval and a home inspection. During this period the buyer can get out of the deal even if the home inspections finds no problems and they have the financing. The problem with this is your house which was conditionally sold was off the market and not being shown. Assuming these conditions are waived and the closing date is normally 30 to 60 days doesn't necessarily mean you will finally close the deal. If the deal falls through on or before the closing date you are left holding the bag. The buyers deposit is held in trust by the brokerage firm and will not be released to you even though the contract is in default, without a court order. Now you have the option of suing but in the mean time you have probably taken whatever extra money you had and put it down on another house. The best case scenario here is that you will have to bridge finance at much higher interest rates and pay the utilities and taxes on both properties until your house is sold. This can be very costly and the buyer usually gets his money back and takes a walk scot free.  Even worse if the bank won't bridge finance, you could be sued by the seller and or lose your deposit. Although this is rare it can and does happen.

FSBO For Sale by Owner: Selling your house by yourself saves the real estate commission fees. There are many websites catering to FSBO's for small fees. Unlike listing with a real estate agent, privately you can put in a clause that the deposit is non refundable after the financing approval and home inspection waiver have been done. This will give you at least some financial relief if it does not close. Make sure the buyer has proof of mortgage approval before accepting the offer. Make sure the deposit is a certified cheque and at least 2 to 5% of the purchase price. Serious buyers with money will not have a problem with this. Another secret agents do not want you to know, is that you can list only on MLS for $300 to $400. This gives you all the exposure you need. The MLS listing is generally the main reason for signing up with an agent. Taking quality pictures of your house is important or hire a photographer for about $150. You can purchase blank real estate contracts from Office Depot or Staples for $15. Here is an interesting link advising against FSBO. There are a few good points but certain statements made are outrageous.

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