New website could slash commissions

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A match-making website encouraging Realtors to bid for the right to represent a client is drawing mixed reviews from sales reps – could a similar version soon follow for brokers?

FeeDuck, a website devised to counteract and deal with the struggle of finding a competent and trustworthy agent, is a real-time auction that allows people to connect with Realtors. However, the service and general websites like it are drawing the ire of local agents who say sites such as this undercut their commissions and undervalue their services.

“We make it look easy because we are trained and we are professionals,” writes real estate agent Jerry Snel in a recent post on the REP forum. “Of course there are agents out there who can’t sell themselves because they don't really know what they're doing so they will list your home for little commission.

“If an agent can’t even negotiate his commission and show his value then why would anyone consider hiring that agent to negotiate and show the value of their home?”

Sharn Kandola, one of four creators of FeeDuck and the company’s VP of marketing, said that she and her partners came up with the idea after the arduous task of buying a house in Oakville, Ont.
 “We came up with the idea because it was a challenge for us to find an agent when we were going through the buying process,” said Kandola, whose co-founders all live on the same street and were looking for houses last year.

“So we decided to create an alternative and challenge people to use our site to find a good Realtor. We’re not here for everyone and agents don’t have to agree to represent a client if they feel their commissions and value are being compromised. This is a tool to help consumers and set them up with good Realtors and allows agents to directly connect with sellers.” 

The site serves as a middleman between buyers or sellers and an agent. The company does background checks and gathers as much information as possible on an agent before recommending them to compete for the client’s business.

The selected Realtors can then bid for the right to represent a client based on their needs and within 72 hours, FeeDuck presents the consumer with the top bidder. What’s more, the agents have no idea who the other agents they’re competing against are – only the buyers and sellers.

Nick Karadza, broker of record at Rockstar Realty, said that his brokerage is interested in the website and sees it as a positive tool for rookie agents trying to expand their client base.
“It’s another alternative for Realtors just starting out trying to connect with clients,” he said. “I can see where other Realtors might disagree but there’s enough opportunity out there for everyone. It’s what they do in the U.S. and it’s what should be done here.”

Ralph Fox, a real estate broker and consultant at Ralph Fox Consulting, said that while the website is a good thing, adding new competition to the market, there is a pendulum effect that’s most likely to occur.

“Everything is a pendulum,” he said.

“People begin to discover how hard it is to sell a property on websites like this [or meet the right agent] and when your margin for error is small, I think a lot of people will circle back to the conventional method of finding Realtors.”
  • KJL on 2015-01-21 1:18:42 PM

    This will last about a week .... Who is determine the worth ? Half the realtors today are part time same as mortgage agents. They cannot survive in the real world so hey think they will be guru's in another field. Good luck ! Mights as well use "Angies List" !

  • New Agent on 2015-01-21 1:23:26 PM

    Was in the realty sales side for years and honestly there is little to listing a house. Agents base value on what someone else is listing for, not actual sales prices, and hope to sell. There is actually so much less work to do for an agent now with educated clients researching listings on line. Also a mortgage agent is the one who make s the sale work and gets paid less than 1%. Realtors on each side can get paid 3% of sale price. Fair to the client?

  • Derek on 2015-01-21 1:46:37 PM

    Agreed. This doesn't appear to help people find 'good' realtors, just cheap ones.

  • a good realtor on 2015-01-22 7:10:07 PM

    @ new agent , if all an agent does is list the house they are not very good agents. An agent markets , appraises, advises, and acts in their clients best interest. Ask any one who has sold or bought without a good agent and they will tell you all the things they did wrong, which may have cost them $

  • Reality Check on 2015-04-07 6:52:31 PM

    Not sure how this site "helps consumers find a good REALTOR®" when the site allows anyone to join that is a registered agent. If you ask me it does a huge disservice to everyone including the consumer. The lowest bidder gets the lead (which is a horrible business model to begin with...just ask any homeowner that's chosen the lowest contractor bid and then a month later gets someone who knows what their doing to come in and fix it, and this time at a premium rate), doesn't know who the agent is, and is going to feel obligated to use that person because they won the bid, as well as the agent feeling obligated to take it on even if they don't want to because they just dropped almost $200 on a name and phone number.

  • Sharn on 2015-07-11 5:04:48 PM

    Hi Reality Check,

    Just noticed your comment - sorry or I would have replied earlier.

    We don't approve everyone who is a registered agent. We want to be sure that the agents have a good reputation and are from the best brokerages. We've successfully made introductions that have led to home sales and both parties being very happy with the results :)

  • Michael on 2015-09-04 10:59:12 AM

    The system is flawed as it does not guarantee any serious sellers are actually on there. Let’s see some actual numbers. How many people that post their property end up listing their home within the stated time period. How many sellers actually sign up with the “winning bidder”? How many times do most sellers repost their property? How many reposts before the seller is willing to meet with someone.

    I was curious to give it a try. Lucky me, I was the winning bidder. $170 later, I received a contact # and an address. I phoned the seller several times (because it seems like a pay as you go phone that is always off), and never did end up speaking with anyone.

    I sent a quick follow up email. The seller wrote back, and seemed to want an agent to do it for even less than the "bid". Which I was even willing to do. I made a very competitive offer on her particular property. (.5% + 2.5% for a cooperating agent), and (2% if I can it without any other agents). Have not heard back from them since.

    The lead is gone, $170 is wasted, and feeduck will encourage her (if the person actually serious to sell), to go on the site again and look for another agent that will cost another agents $170 for a dead lead.

    The way I look at it is, $170 business expense. ($20 in HST that I will get back, and $75 in income tax that the CRA will not get. Net Loss = $75. Not the end of the world, but disappointing in principle. If I am not even given an opportunity to explain what will provide in person. It is just a waste of money. I am busy, but not swamped (end of summer!). so I thought I would give it a try. I am happy to give deals, as I focus on the bigger picture. Good Deals, Good Service = Happy Customers, and Referrals.

    It is a very flawed system, as there is absolutely no warranty for Sellers/Agents. I strongly doubt they are "prescreened" much beyond a phone call "Is it your house? Are you signed up with any other agents?".

    Obviously FeeDuck wants as much volume as possible at $150 per head. There is no motivation for them to confirm if sellers are actually serious or not.

    If sellers were required to leave a deposit (even refundable), I would be much more impressed. Even $50. It would prevent a lot of tire kickers from posting their homes up , and would show that feeduck is actually a reputable company that is looking out for interests other than their own.

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