Red Tape Wrapping

Who likes birthdays?

June marks the 20th anniversary of REM (Real Estate Magazine), a news magazine dedicated to the traditional real estate profession. Their news blog did a retrospective piece looking at what has changed in real estate over the last 20 years. It did not surprise me that the first quote was on the internet.

“If you look at the last 20 years, the biggest change has been the Internet. Fundamentally it has changed how we are perceived, how we do business, and how people can access information, which is the key,” says John Powers of Claussen Walters & Associates in Lunenburg, N.S. (25 years in real estate)

I agree the key is "how people can access information". Some stats say as high as 90% of people start their house search online. When this information was made available to the general public it changed the way the business was handled. No longer are people dependent on a realtor for their housing information, it as all online. Dwindling are the days of spending your Saturday and Sunday in the back seat of a real estate agent's Cadillac looking at house after house. You spend more time on a computer short listing properties that match your requirements.

Opinions didn't end their. Technology is not the only thing to have changed.

“What’s changed is the amount of bureaucracy and the amount of forms. (In the 1980s) the listing form and the purchase sale agreement were one page. Now they are each 10 to 15 pages. The amount of paperwork, the entanglement with federal regulations for the Privacy Act, terrorism, money laundering, the collection of HST – all that stuff has impacted our business. We’ve become a bureaucratic machine, much different and much more regulated and litigious,” says Powers.

Bureaucracy costs money, and plenty of it. Just ask your local politician or health care professional.


I use the health care profession because realtors often compare themselves to surgeons. Have you seen the ads in the paper likening selling your house to an appendectomy? I even got an email recently from a realtor with Prudential Grand Valley Realty where he said "Real estate costs are very high and the client pays for a vast network. Our commission rates are justified because of all of that.... Are you going to tell people also that they should operate on themselves and that a surgeon's fees are too high?"

Extra steps and procedures that need to be done all have to be done by someone. As the agent above states you pay for this bureaucracy? When you choose to cut the red tape of bureaucracy you get to put the savings to work for you, drop your price by the cost of their commission.

Think of it this way, two identical properties located right next to each other should take the same amount of time to sell. As one of the home sellers you have a way to reduce your price by the high cost of commissions ($10,000-$20,000 in most cases) with out effecting your bottom line. Viola, competitive advantage!

M