Richard Silver

Real Estate: Competition Bureau vs. CREA: Editorial In Today’s Toronto Sun

I salute the Toronto Sun for its balanced editorial on the Competition Bureau’s fight with the Canadian Real Estate Association. It is timely to have a realistic and unemotional discussion of the pros and cons of this situation copied below or on their Website :

Home sales — can’t we get along?: Editorial, Wednesday, March 24, 2010

A fair deal for consumers in the residential real estate market starts with the realization not everyone needs the full services of a real estate agent to buy or sell a house.

That’s why Monday’s decision by the Canadian Real Estate Association  to open up its super-popular Multiple Listing Service  to homesellers for a few hundred dollars, rather than by having to employ the full services of a real estate agent, is welcome.

The best thing for consumers is increased choice and competition.

Obviously, some people are perfectly capable of buying or selling a house themselves, just as some are perfectly capable of buying and selling stocks without a broker.

They don’t need agents taking 2.5% off the top, or $10,000 on the cost of a $400,000 home, from both the buyer and seller.

By contrast, other consumers may want an agent doing all the work for them, or providing some services and not others.

Again, that’s the beauty, or should be, of choice and competition in the market.

We understand the concerns of the CREA  — whose members voted in favour of opening up their MLS service Monday under threat from the federal Competition Bureau .

It immediately dismissed the move as inadequate, arguing the real estate industry doesn’t allow enough competition in the market.

On the other hand, running the MLS like the Wild West, with anyone being able to make any claim in selling a house, wouldn’t be good for consumers, either.

It’s also understandable the real estate industry wants to maintain some exclusivity to the MLS, which it created.

Rather than having this dispute decided by the Competition Tribunal  — which is where it appears headed — the best outcome for consumers would be a negotiated settlement.

Surely there’s a happy medium between the industry holding a virtual monopoly on home sales (of course people can sell their homes privately, but the best deals generally come through using MLS) and a free-for-all, where potential buyers won’t be able to trust the listings.

We’d encourage the CREA and the competition bureaucrats to find it, because imposed solutions are never best for consumers, the industry or our economy.

The Toronto Sun Editorial.

This entry was posted on Wednesday, March 24th, 2010 at 8:12 am and is filed under Around TORONTO, Real Estate, Toronto. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

1. Tony Luke said at March 24th, 2010 at 2:33 pm

   Richard,

   again, I commend you for stepping up..

   there are few mls rules and regs that do not have an antecedent in some situation we wished to correct..almost without exception they were introduced to correct a sense that buyers or sellers were felt to have been dealt with unfairly..the system we fund and operate is the “gold standard” because we made it so..

   to allow private sellers free reign, permits a special class of listings operating without rules ..this hardly serves the public and is not something we should entertain or fund..what the cb calls anti competitive we see as consumer protection…we are on the right side of this issue..the cb is not..

   we should not negotiate against ourselves..we have made a more than fair offer

2. Alice Taylor said at March 25th, 2010 at 5:01 am

   Richard,
   When I think about the many restrictions Realtors obey by our self-imposed CREA rules, from the size of my name vs. the brokers name, and wording in an ad, the details in an mls listing that you can be sued for if incorrect, to the reporting system for money laundering…allowing the public consumers to list on our MLS systems is to me insane. Who will trust these listings? Watch the law suits fly then. Realtors have have built an MLS system that exudes integrity and respects privacy laws. Move over ebay !

3. Carl said at March 25th, 2010 at 6:58 am

   I will start by saying that I believe there is much room for change in the industry.

   However, when there is opportunity for compromising the integrity of information on the MLS, the end result will be a huge step backward for all (esp the consumer)

   The best example I can point to in respect of the data integrity issue is in my experience with my former website provider (which will remain nameless).

   The company I used allowed for broker reciprocity in respect of shared listings. However, the listings did not feed directly from the board level MLS system. Instead, Realtors had to input the listings manually.

   The result was very poor data integrity in the way of expired, solds or suspended listings which were not updated by respective Realtors.

   Consider that the people entering the data and failing to update were Realtors (they were not bound by MLS rules given it wasn’t the MLS platform). Now imagine the impact when the public is allowed access without a system of checks and balances.

   The unreliable data above inevitably was the primary reason I chose to end my relationship with the provider. I received an unending number of complaints from prospects where I had to explain myself. I was made to feel like I was advancing a “bait and switch” sales tactic.

   The rule of “garbage in=garbage out” will most certainly be applicable to an open MLS system.

4. john said at March 31st, 2010 at 12:07 pm

   i’ve sold 2 places alone via kijiji.ca and saved a lot of cash.

   i have bought my existing place using a realtor and would of never been able to do so solo.

   i think both sides have their advantages however in my opinion realtors are a bit over paid… people work their whole lives to save up the 5% downpayment… and agents make that with one sale.

   i believe that there is a need for full service for the non savvy people however realtors should be more flexible on their rates for people like me that don’t need the full service.

   there needs to be a balance…

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   [...]Real Estate: Competition Bureau vs. CREA: Editorial In Today’s Toronto Sun | Richard Silver’s Downtown Toronto Blog[...]…

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