When it comes to cutting land transfer taxes that tack on thousands to the cost of a home, Canada’s realtors are happy to talk.
But when it comes to realtors’ fees, which have been soaring in recent years in tandem with house prices, the realtor lobby will accept no questions. And they will tell you you're not even allowed to ask about it.
The Toronto Real Estate Board (TREB) hosted a campaign event for Doug Ford this week, giving him a venue to promote his plan to cut Toronto’s land transfer tax by 15 per cent.
But when a CityTV camera operator asked about real estate agents’ fees, which eat up more than land transfer taxes, TREB representatives pretty much lost their cool.
“I don’t think that’s a topic of discussion,” TREB’s Von Palmer responded, as quoted at the Toronto Star.
Insider tip: Reporters hate it when people try to tell them what is and isn’t a topic of discussion. Palmer’s response almost guaranteed the subject would get pursued. And it did.
“That’s the lion’s share,” CityTV’s James Tumelty said. “It’s that real estate commission.”
“Right. There are some who choose to attack realtors in this process. Realtors are not the problem,” Von Palmer said.
Eventually TREB president Paul Etherington interjected: “You know what? That’s an inappropriate question. Who pays for you? Let’s end this conversation now, thank you.”
With the average house price now just short of $400,000, and realtors typically taking 5 per cent, an average house sale in Canada makes $20,000 for the realtors.
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According to StatsCan, real estate professionals have seen earnings jump nearly 13 per cent over the past year. And Toronto’s realtors are set to take in a record haul of cash in 2014.
“We could be flirting with a new record for residential sales reported by TREB members this year,” the board’s senior analyst said in a statement released Friday.
Sales in September were up 10.9 per cent compared to a year earlier, and the average house price jumped 7.7 per cent, to $573,676.
At those price levels, homebuyers in Toronto pay about $28,000 in realtors’ fees on an average home, and the land transfer tax takes $7,185 on an average home. The province takes another $7,935.
So yes, realtors’ fees are a larger part of the cost of buying a house than transfer taxes — about twice as much, in Toronto.
TREB and the national realtors’ industry group, the Canadian Real Estate Association (CREA), are somewhat notorious when it comes to trying to control the debate about the housing market.
Neither the president of CREA nor the president of TREB would grant HuffPost an interview for a recent series of stories about the reliability (or lack thereof) of Canada’s housing data, and CREA has a history of not making members of its executive committee available to talk to the press.
Here’s the Toronto Star’s full transcript of the exchange at the Doug Ford campaign event. The people involved are CityTV camera operator James Tumelty, TREB president Paul Etherington and TREB public affairs head Von Palmer.
Tumelty: “For all the reasons that you said the land transfer tax hurts seniors…and for the reason that real estate prices have grown considerably…should real estate commissions be reduced too?”
Palmer: “I don’t think that’s a topic of discussion.”
Tumelty: “That’s the lion’s share…it’s that real estate commission.”
Palmer: “Right. There are some who choose to attack realtors in this process. Realtors are not the problem.”
Tumelty: “I’m not attacking, just asking a question.”
Palmer: “Fair enough. But the homebuyer pays the tax. People don’t work for free, by the way. Realtors provide a service. You have a choice to use a realtor or not use a realtor. But let’s not run away from the facts, though: the homebuyer pays the tax. That is the problem, because those are the people that are hurt. So it’s not a question of commissions or what we give up. The question is who’s hurt by this tax and who benefits when you start to take it out.”
Tumelty: “Same idea when they don’t have to pay the real estate fees.”
Etherington (interjecting from side): “You know what? That’s an inappropriate question. Who pays for you. Let’s end this conversation now, thank you.”
Reporter: “Whoa, whoa, whoa, whoa. He’s allowed to ask a question.”
Etherington: “Thank you very much. Inappropriate competition question. Not appropriate for this. Thank you very much. “
Reporter: “Sir, who are — you’re regulating the press conferences? If he wants to ask a question he can ask a question.”
Etherington: “Not a question that might be anti-competitive. And it’s not a proper question for here. Thank you very much.”
Reporter: “Sir, who are you?”
Etherington: “I’m the president of the Toronto Real Estate Board, Paul Etherington.”