Wall Street Journal<\/a> says a new Justice Department investigation could change all that and \u201cput downward pressure on the fees paid by home buyers and sellers.\u201d<\/p>\nIt\u2019s an investigation that\u2019s sure to be watched closely in Canada as well, where real estate agents have pre-emptively issued press releases asserting they have nothing to do with the rapid increases to the country\u2019s red hot market.<\/p>\n
\u201cBecause the work of real estate brokers has sometimes been wrongly blamed for the rapid increase in property prices the Quebec Real Estate Association analyzed the underlying context that has truly led the market to such a great imbalance,\u201d it wrote. \u201cIt identifies a series of factors arising from the pandemic that exacerbated the situation and created what might be called a perfect storm, where supply was clearly insufficient to meet the unanticipated demand.\u201d<\/p>\n
In other words, don\u2019t blame us. The US National Association of Realtors takes a similar approach to fees, which are typically five per cent of a sale but have slipped to 4.9 per cent after peaking at 5.4 per cent in 2012.<\/p>\n
\u201cThe NAR says that the current commission structure also encourages more competition by giving all participants in local multiple-listing services equal access to information on available properties,\u201d the WSJ reported. \u201cIt also helps make homes more affordable to first-time and lower-income buyers, the trade group says, because they don\u2019t have to pay their own agents up front.\u201d<\/p>\n
The Justice Department will investigate whether the commission rules stifle competition. If it finds against the industry, it could impose new rules around structures or transparency.<\/p>\n
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<\/a>Photo: James Bombales<\/em><\/p>\n