Is a buyer agent’s role contrived?
There is a false dichotomy peddled by salespeople in the real estate industry: you either hire one of them, or you have to do everything yourself. Worse yet, the salespeople sometimes even try to convince people they will not be able to buy without them. Only they are licensed to provide you the full service you apparently need. But what does full service mean here anyway? And are these salespeople even qualified to provide it? Before the advent of internet mass adoption, the most difficult part of trading in real estate was finding a buyer or a seller for a property. Theoretically, we have had the technology to eliminate salespeople the moment the Sears catalogue came out. First, let us address what full service actually means for a buyer in real estate. It means that a salesperson will consult with you, tag along with you as you view homes, and finally submit and negotiate offers on your behalf.
Salespeople claim that they are “showing” clients homes, but that claim is ludicrous on its face. What does showing even mean? They have never set foot in the home either. Perhaps reading off information from the listing? Narrating the tour? Perhaps they are going to point to the washroom and explain that is the philosophy chamber. Somehow we don’t think anyone needs explanations about how the toilet works, nor any other part of the home. I can just as well argue it is the buyer showing the agent the home. Unless it is that home in Philadelphia that came with a sex dungeon, no explanation is needed. Whatever your opinion of property salespeople, you must still do the legwork and show up to see each home. While they might book these showings for you, it is as easy as picking up the phone and calling. Is that sort of service really worth tens of thousands of dollars? The internal system for these salespeople even enables automatic appointment booking, but they deliberately prevent anyone but them from accessing it.
One of the worst aspects of the service salespeople provide is when they masquerade as other professions. Taking advice on physical defects of a home from a salesperson is about as prudent as taking it from an accountant. While there may be salespeople and accountants who also know something about home inspection, they are not inspectors and nor are they general or even specific contractors. Their opinions about home defects are worthless at best, and dangerous at worst. If you do buy a home that had undiscovered defects, the salesperson you may have hired will have nothing to do with the process of recovering any damages. Another profession these salespeople masquerade as is a legal professional. Under no circumstances would we ever advise a client to have a legal contract drafted by a salesperson. Nor would we suggest taking advice about the clauses of that contract from them. They are not trained in real estate or contract law, and they can and do botch contracts. Trusting a salesperson to do so is about as wise as hiring a plumber to do a root canal.
Interestingly, the salespeople also advise clients what to bid on a home. Not only are they outmatched by machines for the task, they have no more information than anyone else these days. They do not have any better tools than the layperson has at their disposal. They do have a strong motivation to get you to buy anything, and so push clients to buy faster.
It is no coincidence that in most other countries a buyer’s agent is not a thing. In the UK and Australia for example they simply do not exist. In those countries by the way it is also illegal for a salesperson to be drafting contracts. In addition, everyone must pay for their own representation in those countries, and demands for a buyer agent’s commission would probably be viewed there as an awkward attempt at extortion. Why then, do so many people use these salespeople in Canada? Are Canadian home buyers uniquely helpless? The answer is that this informal cartel creates artificial barriers. In order to submit an offer, a buyer needs to know the seller’s name and the legal PIN of the property. However, you must first understand that there are two versions of every listing on the MLS: what you see, and the full internal listing that only agents can see. You cannot see the necessary information to place an offer while these salespeople can. Theoretically, anyone can go to onland.ca and perform a search of the land registry for this information. That is not free of course, because the government of Ontario decided to allow a company called Teranet to have literal monopoly control over electronic land registry. Each search will cost a person north of $30. Then the full listing contains “broker notes”, which are notes kept away from public view, and even away from the seller’s agent’s own clients. Sometimes (around 10% of listings) these notes state that the buyer agent’s commission will be reduced if the seller’s agent has to do their job and show the home. Or they contain a reference to other forms they would like submitted with the offer, which are hidden from public view. Finally, with a move that can only be described as cartel-like, some salespeople even try to block people from viewing a home unless they are hiring a member of this cartel.
As you can see, salespeople are unqualified to provide the service they claim to provide. A fair part of the service is entirely contrived. The ZVR solution is to maneuver around this unfair system. We provide the full broker listings and the hidden forms, allowing you to either submit an offer yourself or have your lawyer do so. We provide you an hourly real estate agent whose role is to circumvent being blocked from viewing some homes, and to prevent the discount being reduced. It is a shame that we need to do so. In a fair market ZVR wouldn’t even need to exist. Until legislation changes the market, it is unfortunately the best option.
