Great Article by Michel Friedman posted on REM website
Years ago, when our industry was managed by the provincial ministry, I was broker of record of my own company and I contemplated starting my own real estate for sale by owner (FSBO) website.
I quickly realized when developing my marketing strategies for that website that I may be in conflict with real estate rules and regulations, so I decided not to go ahead with the site. Years later, with popularity of the Internet, FSBO websites thrive. They are cheered by the public, they win professional marketing awards, they win provincial business awards, they sell franchises and in the latest marketing gimmick, they “associate” themselves with Realtors who “help” put properties on MLS.
I have examined a couple of popular websites that market in Ontario, I also looked at the “association” they have with “real” Realtors. And as a Realtor, I find some of the things they say and do unsettling.
Consider this: Instead of this huge website offering the help of a Realtor, think the other way – A Realtor hiring a FSBO website company to assist the Realtor to get business. That makes the FSBO company an unlicensed assistant, does it not?
So, if the FSBO website is acting as unlicensed assistant, procuring listings for a Realtor to put on MLS, how can this be allowed?
Here are some issues and concerns that I found on some FSBO websites.
Site “A”: 1. When a property is sold privately, the company puts a sold sign on the property, giving the impression that they sold the property and not the seller privately, thus misleading the public to think that they are a real estate company.
2. The website states that Realtors charge “usually five per cent or six per cent commissions” and says, “Paying five per cent or six per cent of the sale price is traditional for real estate agents.” I held senior positions in several real estate companies in the GTA and had access to thousands of listing agreements, and I can tell you, this is not the case. Again, the site is misleading the public and scaring them off Realtors.
3. They claim on the site that they “Teach people how to sell their home” and that they are “local experts”. What credentials and education do they have to make these claims?
4. Quote from a website: “If saving money makes you sick to your stomach, we’d recommend an agent.” This is slanderous and is not tolerated in our profession, but apparently it is okay when you are dealing in real estate without a license. By the way, this company is now proud to claim that they are “associated” with “agents”.
5. As part of their assistance they state: “Sellers will price their home similar to others…” This will be done (I am assuming) with the assistance of their “experts”. Clearly a badly executed C.M.A (no “solds” to compare) done by non-professional, unauthorized people.
6. “We can help you get on realtor.ca”. It’s clear to me that this is solicitation to list properties to sell – not allowed by non-licensed individuals or companies.
7. The site uses expressions like “relisting costs” and “sale consultation”, giving the public the impression they are dealing with a “legitimate” licensed Realtor.
Site “B”: 1. The site claims they offer “ALL the tools and professional assistance you need to sell your home.” Really? Do they even know what all the tools are? Do they know the difference between professional assistance, which is based on a lot of education, and amateur limited knowledge and limited resources from non-licensed help?
2. They will (according to them) also provide: Ongoing support to take you through the sales process.” They will also provide “the complete set of tools to determine the right price.”
3. They claim they have 235 “sales representatives”. Are any of them licensed? Are any of them authorized and educated to help determine the right price (market value)? Is the public not being misled when they see “sales representative” beside a name, giving the impression they are dealing with a Realtor?
4. In a paragraph titled “Why choose us”, this website is bragging that so many thousands of homes are “sold through us”. Is this not trading in real estate without a license? What if a licensed Realtor put out a statement like that if his license expired for just one day? How long before the provincial regulator issues a warning to this person about the consequences of dealing in real estate without a license?
5. A mention is made to an “association” with a “real” Realtor and that for an extra fee, your listing will appear on MLS. I have gone on this website asking for information about selling my house with the “help” of a Realtor. I found out the Realtor is in Ottawa (I live in the GTA). I did not take it any further.
Will that Realtor come to Toronto to meet sellers and “I.D” them? View the house? Measure the house? Ask the sellers pertinent questions? Check for visible deficiencies?
My guess is no.
Is this the spirit and the intent of the due diligence laws and of provincial regulations in regards to listing a property? Am I missing something here? Have the rules changed?
Or does our real estate license not mean anything anymore to our licensing authorities?
Is the public only being protected from us (licensed Realtors)? If you are not licensed, you are free to make the claims above? Help me out here!
Broker of Record
Orange Square Realty