entries filed under 'mortgage' tag:
posted by Odin on Apr 03, 2009
Today I want to tackle the Middle Man profession. Middle men, or brokers/agents, are just a layer that lies between you, the consumer, and the product or service you are after.
There are several categories of middle men out there, many of which are listed on SeekOdin, such as real estate agents, insurance brokers, mortgage brokers and travel agents. They all have one thing in common: they don’t ACTUALLY provide you with a tangible product or service, but they supposedly help you in the search process.
Now insurance and mortgage brokers, I can understand and tolerate. What they are getting you is harder to find and not widely available to everyone on the internet for example. Plus, they actually get you a discount since their business model relies on volume: the more they sell, the cheaper the policy, resulting in a discount that is transferred to your insurance policy or mortgage contract.
On the other hand, realtors and travel agents are becoming less useful. Before the internet, sure, it was hard to know what properties are for sale, or what itineraries are available for a trip. But with all the information available to us today, I do not really see the benefit of going through a broker or agent. I am not advocating the complete eradication of these professions, but in a perfectly liberal capitalist society, where the market rules, they represent a market inefficiency that might get ironed out and see its purpose dwindle with time.
When it comes to real estate, as an individual you are either a buyer or a seller. As a seller, your goal is to get listed on mls.ca (now realtor.ca), Canada’s Multiple Listing Service, combining all of the major agencies’ listings. The only way to do this is to go through an agent, so you are pretty much forced to use the middle man. You may choose to go independently, and try bytheowner.com, a growing trend, but you would be reducing significantly your potential buyer’s pool.
However, as a buyer, once you have access to mls.ca, there is no real incentive to go through an agent. During my condo hunt a couple years ago, I actually got in touch with a few, and let me tell you, they didn’t do much at all. I gave them my list of requirements, and everything they showed me made it seem like they never even looked at it! In the end, I bought a condo that I actually found myself, from the Gazette’s Sunday open-house listings.
I think the future of realtors lies in reinventing themselves as more than just brokers, because once the information is open to everyone, the ‘search’ element becomes accessible to all (although it remains time consuming). There is tons of room for derived or specialty services; some buyers want investment property, others are foreigners that don’t know the city or don’t have time to do visits, etc … To sum up, as pure brokers for buyers, their necessity is declining.
It is just my opinion, but with time I see all middle men losing their grip on their respective markets, due to the increased proliferation and accessibility of the one thing over which they had complete control: information.
about the blog
MTLRants© is Seek Odin's brand new blog, bringing you entries from our staff and other contributors. The blog will cover topics and issues related to SeekOdin's central themes. Mostly, it will deal with the difficulties and frustrations of dealing with service-related businesses in Montreal.
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