Image: Stephen Boisvert
Earlier, we reported that the Competition Bureau has brought a case against the Canadian Real Estate Association (CREA). The argument that the Competition Bureau is making is that the CREA’s Multiple Listing Service (MLS) is anti-competitive, because all listings made through a real estate agent must be made through this system. They also argue that since these listings require non-negotiable listing fees, they artificially inflate real estate costs for consumers.
The CREA has not taken this issue lying down. They feel that although listings on the MLS are mandatory, the MLS helps make the system fair and equitable. If other listing services were to crop up, some of them might be unscrupulous or sloppy. Consumers and their agents might be misled by information that has not been vetted by a central agency like the MLS.
As well, the CREA points out that they allow a great deal of competition amongst agents, and that their service actually helps promote this competition because it creates a level playing field for listings.
The CREA did not want this fight: they tried to negotiate with the Competition Bureau, and are still trying to work out a deal. Many observers think that the Competition Bureau is pushing the CREA very hard on this because the Bureau has been accused of being too slack on potential anti-competitive groups and organizations.
What is the potential outcome for consumers? At bottom, if the Competition Bureau succeeds and new players vie for listings, the listing fees for consumers will likely begin to drop. Even if the Competition Bureau doesn’t win at the Competition Tribunal, any settlement that is made will likely be to the benefit of the consumer, at least in regards to the costs they pay.
However, all of this will take time. Until everything is sorted out, you will still be listing your homes in the same way.
In other words: if you are considering buying or selling a home, don’t let these news stories affect your decision. By the time everything is sorted out, you will have hopefully made your real estate transactions.
Nelson Goulart
Broker of Record with Signature Service GMAC Real Estate
www.ssgmac.ca
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Jon Hall
Your advice is right on and should be trumpeted by all realtors. However some of your information in the first paragraph is incorrect and could lead to false conclusions.
All listing by a real estate agent do NOT have to be posted on the MLS. 1. Only REALTORS can post to MLS and 2. even REALTORS can carry a listing as an exclusive with the permission of their client.
You should also be careful around the tern “non-negotiable listing fees”. As you know the commission and other fee arrangements are negotiable but I suggest that those MLS Systems that charge a “listing fee” would be unwilling to negotiate this fee. In our board there is a “success fee” paid after the successful fee and is variable depending on the transaction amount. This is not negotiable.
Nelson Goulart
Good points Jon, I stand corrected on both of your comments. Listings do NOT have to be posted on MLS, consumers have always had the option of being exclusive and commissions in our industry have been negotiable with various different models emerging for many years now.