More than 50 real estate agents wrote to me after the “controversial” commentary I wrote in The Globe about how to hire a real estate agent. My conclusion is that most of them are delusional about their roles and the value they add.

None of them, of course, could challenge the main thrusts of the argument – although some tried. Instead they went off on tangents and blathered about how proud they are about their profession. But even with this self-serving exercise they only made it clearer that they’re living in a bygone era.

A common refrain was that they have to charge sellers a lot because it costs a lot to advertise for, or otherwise acquire, listings. But that’s clearly absurd. That’s their problem, not the customers. It’s like a law firm saying “oak panelling and spiral staircases are expensive, but we need them to impress clients, so we have to charge you for it.” Or a mutual fund firm saying “we have to charge you 3% to manage your money because we need to advertise our funds to attract new business.”

The agents could always attract new business by charging less. Apparently that doesn’t appeal.

I’ve learned from long experience that when a million people write furious responses to something I’ve written, but never actually rebut the main points, I’m right. People who are confident in their abilities, whether stock investors or real estate agents, may completely disagree with me but they won’t bother to write. They figure I’m wrong but carry on because they’re too busy and not insecure.

That said, one point, made by a realtor in the comments is worth addressing: the idea that it’s illegal to offer an agent incentives on commission to make it worth his while to get a higher price  (e.g. 2% on the first $600k and then 6% on the rest).

First, that may be true in Ontario, but not where I live (the law varies by jurisdiction). Second, even in Ontario it’s the easiest thing to get around. Agents are always cutting deals. They can cut one to achieve this logical incentive system without contravening the (idiotic) law. A listing agreement can be changed after an offer is received to reflect the dollar amount agreed on.

Speaking of breaking the law, some agents do it all the time, which explains why discounted commissions aren’t catching on fast (although they are catching on). I’ve heard from countless agents who try to offer a reduced rate, only to have another agent tell them they have a very interested buyer but won’t show the property unless they get a higher commission.

That is illegal, not to mention completely unethical, yet it happens all the time.

Realtors want to lynch me today because of an article I penned in The Globe and Mail. If they’re mad, I must be on to something.

And for the record, here’s what a portfolio manager wrote to me: “Great article. I’ve always thought that the conflict of interest that an agent faces (between selling fast, versus maximizing the price for you) is one of the riskiest financial arrangements facing consumers.  A delta of a couple of percent, with today’s housing prices, is a very significant amount of after-tax dollars to most people, but yet so few people – from what I have seen – think about it at all.”