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The Commission Model Questions & Answers
Why the real estate commission model is a 100-year-old con, and how the math proves it.
01
The Origins of the Commission Model
Where did the percentage commission model originally come from?
Did that logic ever make sense in real estate specifically?
When did other industries move away from this model?
02
The Information Revolution and Its Impact
What happened when technology reached real estate?
Hasn’t the job gotten harder over the years?
Doesn’t that justify keeping commissions high?
Why should technology have changed this?
Why is a flat-fee model the logical next step?
03
Who Works for Whom: The Sub-Agency Problem
Who did the real estate broker originally work for?
What about the broker who physically accompanied the buyer?
So buyers had no advocate at all?
When did that change?
How did Quebec address the sub-agency problem specifically?
So was the problem fully solved in Quebec?
What happens when a buyer hasn’t signed a BCP?
04
The Payment Conflict: Funding Your Adversary
Where did the practice of the seller paying the buyer’s broker come from?
Even with a BCP signed, is the conflict of interest resolved?
Is there a second conflict buried in the numbers?
Does the OACIQ acknowledge any of this?
Has anyone taken regulatory action against this structure?
05
What You’re Actually Paying For
Is it true that you get what you pay for in real estate?
So why has the high-commission model survived for so long?
So what does a high commission actually buy you today?
What about the coaching industry? Isn’t that proof brokers are investing in their skills?
What about the listing videos brokers produce? Don’t those help sell the home?
What level of education is required to become a broker in Quebec?
What does the program actually cover?
What does that mean for how we should think about commission rates?
06
The Marketing Myth
Where do buyers in Quebec actually come from?
Doesn’t that mean expensive marketing packages are mostly useless?
07
The Alternative: A Different Model
What does a transparent, flat-fee model actually look like in practice?
Isn’t a flat fee just a race to the bottom that hurts the profession?
Should seniors specifically worry about traditional commission structures?
08
The Bottom Line
So what is someone actually paying for when they choose a high-commission broker?
What’s the single best question a seller can ask any broker before signing?