Instead of paying a commission to a listing realtor upon the sale of their properties, Realtor by Retainer allows sellers to choose from one of three prepaid marketing plans and one of three prepaid retainer packages.
The marketing plans cost $2,000, $2,500 or $3,500, and the retainer packages are for either 10 hours ($2,500), 20 hours ($5,000) or 30 hours ($7,500) of a realtor’s time. (Realtor by Retainer recommends homeowners pay buyers’ agents the average Vancouver area commission.)
A shift in payment structure
“The industry hasn’t really delivered for the people who make it up,” says Realtor by Retainer co-founder Cameron Tsoi-A-Sue. “To me, that speaks to the failure of the business model to provide a level of efficiency.”
Tsoi-A-Sue has been in the industry for more than a decade and is responsible for training and agent onboarding at Royal LePage Little Oak Realty in Surrey, B.C.
The Realtor by Retainer concept has received approval from the British Columbia Financial Services Authority (BCFSA), the BC real estate regulator, Tsoi-A-Sue says.
The BCFSA’s response to a lawyer’s letter explaining Realtor by Retainer was: “It doesn’t sound like you’re a brokerage. You’re doing something unique, and if there’s a complaint, we’ll call you,” he says. “They gave us free rein to operate.”
Tapping into the inefficiency
Realtor by Retainer stems from research by Tsoi-A-Sue that found 35 per cent of the 20,614 realtors in Metro Vancouver (comprising the Real Estate Board of Greater Vancouver and Fraser Valley Real Estate Board) did not sell a home in 2022 and earned zero income. “That’s a lot,” he says of the 7,100 realtors with no transactions.
On average, a Vancouver area realtor completes 4.3 transactions per year and earns $65,386 per year, despite an earning model that is linked to the housing price index.
While the top 10 per cent of realtors earned an average of $372,000, the average income of the bottom 90 per cent is just under $30,000, Tsoi-A-Sue says.
It’s not uncommon to see many realtors having strong months where they close multiple deals and have tens of thousands of dollars coming in, followed by months of dry spells with no cash flow.
Many “really intelligent, talented people” are struggling, he says. “Their careers are not the glamorous type of things that the industry promotes.”
Tsoi-A-Sue notes Realtor by Retainer takes the risk of the transaction out of the hands of the realtor. Whether or not the home sells, the realtor gets paid for his hours.
“We’re not a brokerage. What we are providing is infrastructure.”
– Cameron Tsoi-A-Sue, co-founder, Realtor by Retainer
Meanwhile, for consumers, there are “significant savings.”
“There’s more than one way for consumers to pay (realtors) and still get quality service,” he adds, noting the service has nothing to do with discount brokerages which give “discounted service.”
Realtors who participate in Realtor by Retainer remain with their brokerages, says Tsoi-A-Sue. “We’re not a brokerage. What we are providing is infrastructure.”
So far, six or seven realtors in the Vancouver area have agreed to participate. Realtors who’ve signed up have between a few years and seven or eight years of experience. “We want to see that the realtor is doing at least six transactions a year on average,” Tsoi-A-Sue says. “We want to see that they have some documented success.”
To date, Realtor by Retainer has processed about a dozen transactions.
Tsoi-A-Sue says Realtor by Retainer is currently looking at finding builder-developer clients and is in conversation with a handful. Builder developers are “a good entry point to the market.”
Positive reception
The fact that Realtor by Retainer takes care of billable hours and provides administrative support to realtors is an attraction to Allister Carrington, who has joined forces with the service.
Carrington, a realtor with Royal LePage Little Oak Realty with seven years of experience, extols the ability of Realtor by Retainer to provide him with the help of an assistant on an hourly basis.
He says experienced realtors should have some sort of help, and Realtor by Retainer provides realtors “an assistant at an affordable cost” that handles all the paperwork. “It saves me at least a minimum of two to four hours of my day,” he says, allowing him to better spend his time with clients.
“I 100 per cent believe (Realtor by Retainer) will be a successful,” Carrington says. “It fills that void of what everybody needs, which is an assistant, but it’s different because it’s on an hourly basis. I honestly think it’s one of the most valuable things that I’ve seen come out in my seven years of doing this.”
Plans for expansion
Tsoi-A-Sue says Realtor by Retainer is “trying to be very intentional” on having a smooth rollout “so that the industry doesn’t have a huge blowback on this, that it’s going to fit in with agents (and) that it’s going to fit in with brokerages.”
If Realtor by Retainer does well in Vancouver, Tsoi-A-Sue is looking to expand to Toronto next, followed by the rest of the country and the U.S. in three to five years.
“Even if we got a one per cent market share of that big market, that would be beyond my wildest dreams.”