Real Estate Talk:
Why brokers require exclusivity in a brokerage contract
By Joseph Marovitch
James the broker signed a non-exclusive brokerage contract with Mr & Mrs Xavier Hosempepper for a six-month period. James then proceeded to take photos of the house and measurements. James prepared a beautiful listing for Centris over a two-hour period. Over the next three months James placed twelve ads in various papers, performed six open houses where he provided several listings to all the visitors, had eight showings with various potential buyers. James amassed a list of potential buyers who called because of his advertising campaign and whom he spent hours calling.
In the first three months of the campaign James spent over $2500, between ads, gas, licence fee’s, telephone calls, etc.
One day Mr Hosempepper calls James. Mr Hosempepper, all proud of himself, tells James he sold the house to a friend or another broker sold the house. The buyer saw the property on Centris, which James placed, or the buyer noticed an ad that James created and paid to have published, and then proceeded to call Mr Hosempepper or the buyer’s broker.
If the broker does not sell the property on or before the expiry of the brokerage contract, all the time and money spent on advertising, open houses, material, gas, office space, office rent, and much more will not be compensated.
Unlike other professions, brokers acquire expenses before receiving funds. There is no deposit or partial payment along the way like contractors and lawyers. If the broker does not sell the property on or before the expiry of the brokerage contract, all the time and money spent on advertising, open houses, material, gas, office space, office rent, and much more will not be compensated. Brokers take a gamble, which is why brokers must be smart. They must price the property properly to sell, and sufficiently advertise in the right mediums to attract the right buyers.
When a broker signs a non-exclusive brokerage contract with an owner-seller, it means the owner-seller can use the broker’s services to sell the property, but he or she can also use the services of other brokers or sell the property on their own.
The broker pays the photographer to take professional pictures of the property. Then the broker spends time driving to the property and takes another hour or two to take the measurements of each room.
Following photos and measurements, the broker spends another hour or more to enter the pictures, measurements and information from the deed of sale, certificate of location, municipal documents concerning servitudes and rights, onto the Centris system so that local and international buyers can have access to see the property.
The broker then spends more time preparing ads for the local papers and websites and then places those ads into the papers, on the websites, and in newsletters along with prepared flyers that are sent out via snail mail.
‘If an experienced broker assumes a non-exclusive listing, the owner-seller can be sure the broker will not market the property nor spend a cent unless it is to advertise to other property sellers that he or she is busy.’
By the time the first week of the campaign passes, the broker has spent hundreds if not thousands of dollars on the property and hundreds of working hours.
If an experienced broker assumes a non-exclusive listing, the owner-seller can be sure the broker will not market the property nor spend a cent unless it is to advertise to other property sellers that he or she is busy. After all, ads mainly attract other property sellers who assume the broker is busy if he has listings. Amassing buyers is not selling properties. If an experienced broker accepts a non-exclusive listing, he or she is doing this for themselves. There is no commitment to the seller since there is no commitment from the seller.
Next article: The September market and why it is exciting
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Have a great week!
State of the market
The only fortunate outcome of the everlasting Quebec separation issue is that, for the past thirty years, investors have been reluctant to invest in real estate in Quebec. With the issue of separation hanging over our heads, the Quebec economy was suppressed, as many left the province and many refused to move in. The state of events ensured that our economy would lag behind the rest of the country. Since the last referendum concerning the charter of rights, which was overwhelmingly defeated, the economy has grown by leaps and bounds. The real estate market is now booming, unemployment is at an all-time low and interest rates are steady and low. The separation issue has provided an opportunity for today’s investors.
In today’s Montreal Gazette, the Parti Quebecois and Québec Solidaire are calling on the Legault government to tighten French language rules. PQ MNA Joel Arseneau states that “Bilingualism is rampant in Quebec”. We are not France or Italy or Germany. We are a mix of immigrants from all over the world. Bilingualism is a key factor in the stable and growing economy we are currently enjoying and provides a better standard of living for all.
The PQ and Québec Solidaire want businesses with 25 to 49 employees to converse in French only, mandatory attendance to French language CEGEPs only, reinstatement of the French language police, and that Quebec communicates exclusively in French with other businesses. This type of rhetoric scares investment away and reduces our standard of living.
Would it not be nice, just for once, if the government worked for the people and not for their own egos? French is here to stay, but so is English, Italian, Greek and yes, Arabic, to name but a few of the growing cultures in the world and in Quebec. We are better together and as an example for a planet that needs cooperation, inclusion, understanding and tolerance.
Read also: Other articles by Joseph Marovitch
Joseph Marovitch has worked in the service industry for over 30 years. His first career was working with families from Westmount and surrounding areas, hosting children between the ages of 6 to 16 as the owner and director of Camp Maromac, a sports and arts sleep away summer camp established in 1968. Using the same strengths caring for the families, such as reliability, integrity, honesty and a deep sense of protecting the interests of those he is responsible to, Joseph applies this to his present real estate broker career. Should you have questions please feel free to contact Joseph Marovitch at 514 825-8771, or firstname.lastname@example.org