Lawyers Selling Homes Could Upset the Realty Apple Cart

Bob Aaron in Legal, Real Estate Trends


An interesting development in Picton, Ont., provides a glimpse into a possible future business model for real-estate brokerages.

A law firm in Ontario has established its own real-estate agency to handle the needs of the community. Henderson Williams Realty Ltd. is owned by Wade Williams, Kelly Henderson and Matthew Page, three partners of Henderson Williams LLP, a local full-service law firm.

Last week, I spoke to Wade Williams, one of the partners in both the brokerage and the law firm. He told me that the brokerage was formed to give clients in Hastings and Prince Edward Counties greater choice, service and value in buying and selling real estate.

The firm is based on the Scottish model in Edinburgh, where lawyers effectively control most of the real-estate sales market.

None of the lawyer-owners of the Henderson Williams brokerage is a registered real-estate agent. The broker of record for the firm is Mary Jane Wells, who has 14 years’ experience in the field.

When I first heard of the new brokerage, I wondered how Ontario lawyers could own a firm of real-estate agents. It turns out there is no prohibition here on cross-ownership in this type of arrangement.

Henderson Williams Realty Ltd. is licensed with the Real Estate Council of Ontario (RECO) and a member of the Quinte & District Association of Realtors, and the Ontario and Canadian Real Estate Associations.

Its licensed agents can list properties with the Multiple Listing Service and guide clients through the entire process of pricing and marketing, or finding and negotiating a purchase and sale transaction.

The firm is not constrained to the industry standard of 5-per-cent commission charged by most realtors. Instead, it offers its clients a selection of pricing models tailored to the services they need.

It can work on a traditional commission basis, a flat-fee structure, an hourly rate or, according to Williams, “another fee structure we haven’t even thought of yet.”

“Our clients tell us what they want and we work to find a fee structure that meets their needs,” he says.

The sales representatives are salaried employees and this allows the realtor to provide advice and recommendations free of the immediate financial pressures associated with traditional commission sales systems.

In an interesting twist, the firm will act for either buyer or seller, but not both. As a result, the agents will not “double end” a transaction and collect two commissions.

Realty clients are free to use any lawyer of their choice and are not steered to the law firm. Similarly, clients of other lawyers are free to use the Henderson Williams realty firm.

Not everybody is happy with the start-up firm. Some local real-estate agents are disgruntled by the intrusion into their marketplace and have stopped referring clients to the Henderson law firm. Several have even refused to show listings of the Henderson brokerage to their buyer clients.

Despite this, Williams told me they had a “really busy” summer, concentrating on builder sales, waterfront cottage properties and vacant land.

“The phones are ringing off the hook,” he said.

I asked him whether the Henderson Williams Realty business model would work well in a larger market like Toronto.

“Absolutely,” he said.

Food for thought, I think, and a possible glimpse into the future.


Legal     |     Market     |    

Toronto’s most authoritative real estate insights, delivered right to your inbox.