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February 9, 2015

Do alternative payment options benefit investors?

Alternative payment options are the latest trend commanding the real estate industry’s attention, and agents insist that investors and the home-buying public deserve a wide array of options.

“I wanted to move off the standard, almost price-fixing throughout Ontario,” said Tom Goebel, an agent in Windsor, Ont.

“There seems to be a small range of fees, between four and six per cent. There are different rates, but the basic system is very closed. I think the [buyers] should have more choice, so I offer hourly rates and flat fees.”

Scott Simmons, an agent on Salt Spring Island, B.C., added that the seemingly recent shift to flat fees and hourly rates is simply a reaction to what the investors and homebuyers have been demanding.

“Having more choice and selection is good for the consumer,” he said. “You can’t just be stuck in the old days [of charging commission]. It’s up to the consumer to pay what they want to pay. And some consumers are happy to pay for it.”

The situation is less about what the buyer wants to pay and more about the actual cost of buying or selling a home, argued Bob Walmsley, and agent in Saskatoon, pointing to the amount insurance agents pay on each transaction.

“You can’t make a living [by charging low flat fees],” he said. “If you’re doing a fee for service, what are you going to have to charge to cover yourself?”

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