Author: Mayur Arora

9560 124th St, Surrey, BC- MLS F1110001

Happy New Year!

December was a fairly decent month for house sales in the lower mainland. Christmas and New Year’s time was slightly off but that has to be expected. However now it seems like it is really picking up. I had a chat with the Vancouver Board today and a worker there told me that they listed 256 properties yesterday (January 4^th, 2011). Now that is a sizable number of listings to come in the marketplace in one day. Does this mean there is going to be a lot of inventory in the market place for the early part of 2011 or does it mean that the market will heat up as there is more choice. Time will tell.

The Real Estate Board of Greater Vancouver (REBGV) reports that total sales of detached, attached and apartment properties in 2010 reached 30,595, a 14.2 % decrease from the 35,669 sales recorded in 2009, but a 24.2 % increase from the 24,626 residential sales in 2008. Last year’s number of housing sales was 10.3 % below the ten year average for annual Multiple Listing Service® (MLS®) sales in the region. The number of residential properties listed for sale on the MLS® in Greater Vancouver increased 9.7 % in 2010 to 2009.

The previous couple of years have been a bit of a rollercoaster for the real estate market. I would term the present day market as definitely being a steady market. We just sold 6 homes in 11 days – December 26^th, 2010 thru January 5^th 2011. A big chunk of our listings comes from the FSBO (For Sale by Owner) type of a client. To sell a home without the MLS® exposure is very hard.

There can be a couple of type of MLS® listings. One type of listing is where the seller lists it through a different Board other than the seller’s local Board. Some companies such as Property Guys do this. They list properties from Ottawa and hence the listings never show up for Realtors to see on MLX (this is the website that Realtors use to see listings and it has the commission etc.). The other type of listing is a local listing which shows up on the seller’s local board. For example, a seller has a property in Victoria and the local board for Victoria is the Victoria Real Estate Board. When we do a listing for this client it will show up on the Victoria Real Estate Board and not the Ottawa Board or the Vancouver Board. Similarly a property in Burnaby or Vancouver will be listed through the Vancouver board and not a different Board as the Greater Vancouver Real Estate Board is the local board for Vancouver, Richmond, Coquitlam, Burnaby, North Vancouver and West Vancouver.

To list a property through a local board is essential if you would like a Realtor to be looking at the listing or else you are eliminating 75% of the buyers.

After three months of watching his Victoria condo sit stagnant on the market, James Morton decided it was time for a change of plan.

The commercial salesman traded the conventional realtor for a discount broker, whom he paid a flat fee to list his property on the Multiple Listing Service (MLS), and handled the rest of the sale himself.

“I sold it in two or three days, after my 90-day listing had expired with the previous realtor. We went the full route with the market price and not a single peep of an offer. Waited 30 days, went with [discount brokerage] One Flat Fee and it was sold in days,” says Morton.

By saving on the commission he’d normally pay a selling agent, Morton was able to reduce the list price, undercutting the competition without sacrificing profit.

Calling it the “way of the future,” Morton is among a new breed of home sellers circumventing the traditional full-service realtor thanks to new rules governing MLS.

An agreement between the federal Competition Bureau and the Canadian Real Estate Association (CREA), which owns the trademark to MLS, ensures a realtor can now post a listing for a flat fee without interference for the next 10 years.

The agreement went into effect Oct. 25.

The change effectively paves the way for more alternative real-estate firms to enter the market, offering an “a la carte” menu of services, in much the same way an airline offers first, business and economy classes, says Tsur Somerville, director of the Centre of Urban Economics and Real Estate at the University of B.C.

“By allowing [a realtor] to just post and not have to represent, then you inherently give your consent for them not to be full-service. It opens up the possibility for consumers to have a clear choice of services for different prices,” says Somerville.

Somerville believes the change will have some impact on traditional, commission-based realtors, but won’t alter the real-estate industry dramatically. He predicts most home sellers will still choose to go with a full-service realtor because of the complicated nature of real-estate transactions.

Mayur Arora, 34, was propelled to start Surrey-based One Flat Fee because he knew from his experience that there’s a demand for a cheaper alternative to selling property.

In 2006, Arora used a full-service realtor to sell his home and felt the commission paid was not commensurate with the work involved in selling that particular property.

“I sold a home and I paid $18,000 in commission and it really, really hurt me,” said Arora.

The former owner of Vancouver Indian restaurant Maurya says he was always interested in real estate and decided to sell his restaurant and get licensed earlier this year.

By April, Arora had started One Flat Fee after CREA agreed to amendments that paved the way for discount brokers to start up.

One Flat Fee offers home sellers the option of paying a fee of $649 to have their property listed on MLS and handling the rest of the sale themselves. (Commission is still paid if there is a buyer’s realtor involved. The fee is negotiated between the seller and agent.)

Read it on The Province

Real Estate Magazine Online

A Vancouver sales rep is launching One Flat Fee, described in a company news release as “a ground-breaking website to provide Realtor services to homeowners at heavily discounted prices, in light of the recent MLS changes by the Canadian real estate industry.” Sellers in British Columbia can list their property on the MLS system for $649 per listing.

“This is an extremely exciting and historic period for home sellers,” says One Flat Fee founder Mayur Arora, who is licensed with Century 21 Coastal Realty in Surrey. “There are huge savings to be had from using a service such as One Flat Fee rather than using the old and traditional Realtor selling model. The savings, combined with the added transparency and control that sellers have when conducting transactions themselves, will significantly affect the future of property exchange in the coming years. We hope to expand across the country shortly after our launch.”

The four packages available at OneFlatFee.ca provide a range of options. The basic service for $649 includes a listing of the home on MLS, promotion of the property on other listing websites such as Kijiji, and the forwarding of all prospective buyer details to the customer. For $4,999, the most comprehensive package includes MLS and other website advertising, the handling of all paperwork and negotiations, a buying and selling consultation, legal co-ordination and sale completion.

Steve Ladurantaye – The Global and Mail

There’s more than one way to sell a house in Canada. With a deal between the Canadian Real Estate Association and the Competition Bureau pending, three competing models have emerged for consumers to consider.

TRADITIONAL METHOD: $15,000

The representative: Tina Forbes, a ReMax agent, Stoney Creek, Ont.

The deal: She usually charges 5-per-cent commission – but that is split between herself and the agent for the buyer. That works out to about $15,000 on the average home. For the money, a seller can expect Ms. Forbes to consult databases to arrive at an asking price, post a lawn sign, arrange a posting on the Multiple Listing Service, create online picture galleries, hire a stager, set up and handle viewings, run open houses, and handle negotiations.

The reason: “I pride myself on the level of service I’m able to provide to my clients. I like how this job allows me to be creative, and really focus on the ways I can help. This is a full-service job, and I’m literally working all the time. If I’m at a family function, I’ll have my phone with me.”

FLAT-FEE ALTERNATIVE: $649

The representative: Mayur Arora of Oneflatfee.ca, Surrey, B.C.

The deal: For $649, Mr. Arora will post any house in the province on MLS. If sellers want additional services, they can buy them à la carte – a lawn sign costs $100; professional photos, $149; handling negotiations, $500. If a seller decides to go the full-service route, it costs $4,999.

The reason: “We offer the best of both worlds – selling on your own and they can also be on the MLS. Without MLS, it’s hard to sell. But if they do it this way, they can offer some sort of commission to the agent that finds a buyer.”

DO-IT-YOURSELF: $399

The representative: Mike Shanks, Propertyguys.com, Waterloo, Ont.

The deal: Propertyguys.com helps owners sell their homes without an agent. The basic package gets sellers a lawn sign, a listing on the website and access to local representatives who will point sellers toward additional resources if they have questions. It also offers a more robust package at $3,500 that includes traditional advertising, photo galleries, lawn signs and more hands-on help with things such as staging.

The reason: “We’ve been proving for 14 years that you don’t need the MLS to sell a property, you need product placement and exposure. We do that at a low cost, and leave people in control of their own situations.”

Steve Ladurantaye — The Globe and Mail

Real Estate: The Slowdown (video)

Canadians shouldn’t expect a sharp drop in real estate fees, with the country’s largest brokerages vowing to hold the line on the commissions despite rules that make it easier for discounters to muscle in on their businesses.

While a deal between the Competition Bureau and the Canadian Real Estate Association means agents will be able to break real estate services into small, individually priced chunks rather than charge a set commission for a complete sale, companies such as Royal LePage don’t plan to offer à la carte services.

That leaves the door open for a small group of discounters who have already set up shop across the country, offering those who want to sell their own homes to buy a listing on the real-estate funded Multiple Listing Service for as little as $109.

“That type of service may appeal to a certain segment of the market but I don’t think it appeals to those who would traditionally use a professional agent,” said Royal LePage president Phil Soper.

The national real estate association, which represents about 100,000 agents, was locked in a battle with the Competition Bureau over Commissioner Melanie Aitken’s charges that CREA made it impossible for individual agents to offer innovative services to consumers.

Instead, anyone who wanted an agent’s help to sell their home had to sign up for a full slate of services – including the posting of a Multiple Listing Service listing, the handling of negotiations and anything else involved with the sale. The average commission is 5 per cent in Canada, which meant the average national sale price of $324,928 in August would have landed agents a $16,246 commission.

CREA made changes earlier this year that were meant to appease the Competition Bureau, but they didn’t go far enough because there was some wiggle room that allowed it to keep members from offering low-cost services at any time. Thursday’s deal, which must still be ratified by CREA’s members, should end that battle.

“This battle has been about making sure a consumer isn’t forced to buy more service than they may need,” said Mr. Soper. “These changes may well have a profound effect on the lower end of the market, but I’m not sure this is the best time to be offering fewer services considering the market is cooling.”

But even without a settlement, this year has seen a slew of low-cost realty companies set up shop to help those who want to sell their houses on their own.

Joe William of Best Value Real Estate in Ottawa has been putting houses on the MLS for $109. In British Columbia, Mayur Arora of OneFlatFee.ca will place a listing for $649. Other services can be purchased as needed – for example, he will negotiate a deal for an extra $500.

“We’re having our best year, business is up over 40 per cent,” said Mr. William. “It’s been a very popular service, we’re looking at going national.”

Steve Ladurantaye – The Global and Mail

Just two weeks after the real estate industry changed its controversial rules, some quick-footed agents have jumped in with markedly lower fees, drawing the wrath of competitors in the process.

These agents are operating amid what some see as confusion in the industry, created by the Canadian Real Estate Association’s heated dispute with the Competition Bureau. Alleging anti-competitive practices involving the body’s Multiple Listing Service (MLS), the bureau is taking the association to the Competition Tribunal even after CREA altered its MLS rules.

The new rules allow agents to post listings on the MLS without seeing a deal through to its end. Before then, anyone who wanted to list a property needed an agent to see through the entire process and pay a commission that could run into the tens of thousands of dollars.

While the new CREA rules open the industry to new forms of competition, the imminent fight at the Competition Tribunal has left many agents sitting on the sidelines until the dust settles.

But a small group of agents has decided not to wait and is charging far less to list properties, a move that’s good news for consumers but threatens to split the real estate industry into two fiercely competing camps.

One such broker, Ottawa-based Joe William, said he has received angry calls from other agents who can’t understand why he would place listings for just $109, making him “the most hated Realtor in Ottawa.”

Mr. William is on pace to list more than 500 houses this year, most of them coming through his website at ihatecommssion.com, he said. While he’s based in Ottawa, most of his new business is coming from Toronto.

“A lot of agents say I can’t do it but I am doing it,” he said. “The rules aren’t clear, and that’s the whole problem. But I’m doing it, and the volume of calls has been incredible.”

He’s not alone. Mayur Arora, for example, recently got out of the restaurant business and took up real estate in Surrey, B.C., launching Oneflatfee.ca. The service allows those who plan to sell without the help of an agent to list on the MLS, where the bulk of Canada’s real estate transactions are done.

Mr. Arora charges $649 a listing, a cheeky reference to Lotto 6/49. He said it doesn’t matter what the price is, because consumers are so used to spending tens of thousands of dollars on commissions when they use real estate agents. Those who prefer having an agent to perform open houses, negotiate prices and co-ordinate paperwork can get a full-service package for $4,999.

“The price isn’t really the problem because people are willing to pay a lot at this point for those services because they are used to paying substantial fees,” said Mr. Arora, who said he is getting about 65 calls a day since launching last week. “My biggest issue is legitimacy, because a lot of people still don’t believe that this service can be offered legally.”

The appearance of flat-fee agents, CREA said, is a sign that the sector has opened up to innovative business models.

Selling a house is difficult for most people, and most sellers prefer to have an experienced agent handle the process, said Don Lawby, president of Century 21. Just because some business models do not succeed doesn’t necessarily mean the deck is stacked against them, he said.

“This industry is and will always be pretty competitive,” he said. “There are lots of models. In some cases companies have started and not been successful, and it’s not always because of the rules. You can have an interesting model, but that doesn’t mean it will generate a lot of business.”

With the sides deadlocked, the matter appears unlikely to be settled until it gets to the Competition Tribunal this fall. Buyers and sellers are struggling to figure out what the industry will look like in the meantime.

“I have seen so much interest in this flat-fee option but I’m not willing to do it yet because nobody understands how this will happen,” said Nawel Seth, a broker at Coldwell Banker Trail Blazers Realty in Markham, Ont.

October 24th was the much awaited day that the Canadian Real Estate Association (CREA) voted on the agreement in principle that was reached between the Competition Bureau and the CREA.

CREA, which represents approximately 100,000 Real Estate Agents throughout Canada, had come to an agreement with the Competition Bureau on September 30th, 2010 and finally on October 24th in a special meeting in St Johns, Newfoundland. CREA and the Bureau have had been battling for the past three years.

In February, Ms. Melanie Aitken, commissioner of the Competition Bureau filed charges with the Competition Tribunal against CREA saying its actions were anti-competitive. By March CREA had amended its own rules to allow a la carte services to be offered through the MLS® but had left in a provision that could allow local boards to opt out. This change allowed business models such as www.oneflatfee.ca to open shop and offer discounted Real Estate services.

Under the agreement the public will not get direct access to the MLS® or the website realtor.ca — something the Bureau was not seeking. The MLS® system that is owned and managed by CREA is a member to member organization and continues to remain so. The changes that have been approved are to stay in effect for 10 years.

Even though a host of companies might try to get on the Flat Fee Realty band wagon, it is important to know some basic facts. The MLS® system has 2 ends to it. One side is the www.mls.ca which is now called www.realtor.ca. This is the version that the public sees. The other side to it is www.mlslink.mlxchange.com. This version is what the Realtors go to sign in and see the properties including the commission being offered to the buyer’s agent etc. Even though some companies might offer Flat Fee MLS® listings on www.realtor.ca for a discounted price your property is not exposed to Realtors® and hence no Realtor® will bring in an offer simply because he/she does not see it. This can be very detrimental to the seller. Unless you do not mind waiting for a private buyer to come by and make a deal you stand to be at a disadvantage compared to the other properties in the marketplace.

When we list a property, it will always go on both, the public site and the Realtor® site.

Exciting times are definitely ahead. We at www.oneflatfee.ca are celebrating our 135th listing. We are also extremely proud to announce our upcoming launch in Ontario. We should be up and running in the province of Ontario by the first week of December.

The Canadian Real Estate Association (CREA®) and the Competition Bureau came to an agreement on September 30th, 2010. Even though CREA® has agreed to the terms of the deal the 98,000 members (all Realtors®) represented by a few hundred local MLS® Board members have yet to vote and they will do just that on October 24th, 2010. It is very likely that this will be passed and these new rules are here to stay. Melanie Aitken, the commissioner of the Competition Bureau has had her way and has been successful to break what she termed a “monopoly.”

A lot of people call and ask, what exactly has changed. In simple english, what has changed is that the sellers can now pick and choose the level of service they want from a Realtor®. Under the agreement, CREA® will eliminate its ability to adopt anti-competitive rules that discriminate against real estate agents who are hired by consumers only to list or merely “post” a residential property on the MLS®.

Steve Ladurantaye of the Globe and Mail says “While a deal between the Competition Bureau and the Canadian Real Estate Association means agents will be able to break real estate services into small, individually priced chunks rather than charge a set commission for a complete sale, companies such as Royal LePage don’t plan to offer à la carte services.”

While what Steve says is technically correct but I do believe that there will be more accountability as is always the case when there is competition. If we look at the cell phone arena, the rates of new plans has come down significantly in the recent past, with new entrants such as SOLO Mobile and Wind Mobile. One could have never thought of an unlimited calling plan 6 months ago but now the new and the more established companies have unlimited calling plans. If this is any indication then I think that the general public can definitely look forward to lower commissions and most definitely more accountability.

Very recently, one of our clients sold their million dollar home for just $ 649. She ended up saving $ 29,000. Now that is substantial by any standards. She listed with us on the MLS® and got a direct buyer off the MLS® and sold privately. Another client sold their downtown Vancouver Condo and paid less than one percent in commissions.

To quote from the Globe and Mail, “That type of service may appeal to a certain segment of the market but I don’t think it appeals to those who would traditionally use a professional agent,” said Royal LePage president Phil Soper. Most of our clients have used traditional Realtors® before and were sick of high commissions. One of our clients sold their reno and flip project, and had there been a traditional commission structure, he would not have made a dime. His entire profit would have been spent in paying the commission.

The flexibility of being able to sell private, regardless of how the lead comes, is our forte. Even if there is another Realtor® involved in the transaction, the savings are immense. Often times the amount of money being saved is used by the clients to negotiate down and thereby getting the deal done.

Regardless of the reaction by different Realty companies and the media one thing is for sure, interesting times lie ahead and perhaps a bundle of savings…

“Change is the law of life. And those who look only to the past or present are certain to miss the future.”

March 22nd, 2010 is a day that will be remembered for a long time. That was the day that the Canadian Real Estate Association (CREA®) voted and amended its rules to allow for posting services such as OneFlatFee.ca to be able to list on the MLS® without offering other services.

This was done to appease the Competition Bureau but Melanie Aitken, Commissioner of the Competition Bureau was not quite convinced. However, with the changes already made the consumers now have a choice to pick and choose the services they want from a Realtor®. A Realtor® is still free to charge whatever he or she wants but it is going to get tougher for the listing agents. I reckon they won’t be out of business but they will be held accountable and the overall price structures will drop and hence home sellers will now end up saving money.

In 4 months of us in business, we have listed over a 100 properties. We have had very a good success ratio in selling the properties we have listed. The market was really hot when we first started and was a very well balanced market. However, currently the situation is slightly different, the market has tipped and it is now a buyer’s market. This is a great time to buy a property with interest rates still at historic lows and a good level of inventory to choose from.