The Competition Bureau and the Canadian Real Estate Association.

iStock_000004153712XSmallA couple of weeks ago, the Government of Canada’s Competition Bureau  sent a direction to the Canadian Real Estate Association  that CREA remove one of the requirements of membership: Agency or Representation. The media has jumped on this as being very advantages for Sellers and Buyers in that it would allow the Consumer more options. Ken McLachlan, Broker for Re/Max Hallmark Realty Ltd.  said it better than I ever could in this repost of his Blog:

Competition Bureau and CREA

I suppose there will be wide spread panic amongst some in our industry – haven’t you heard? The Competition Bureau has come out with their long anticipated report about our industry. Read about it here in an article from today’s Star. In the report, the Bureau presents that CREA is acting in bad faith when, because of certain rules and regulations, it doesn’t permit certain models of business to flourish. At the heart of the finding is the regulation which requires the listing brokerage to be engaged or part of the selling process if the property is listed with a realtor.

As I understand it, the Bureau wants the consumer to be able to handle their own sale of their property, without having to have a realtor negotiate the deal for them, but they want the consumer to be able to have the opportunity of using a realtor (for a fee) to list their property on MLS.

“Mr and Mrs. Homeowner, I will process your listing on the MLS for a fee, all calls, appointments and offers will go directly to you and you will negotiate your own deal with the coop realtor.” Seems simple enough for me. In all of my real estate years, the consumer or homeowner has always had a choice. A choice of who to pick to sell and market their home, a choice of what commission will be charged, and a choice to either list exclusively, through the MLS, or privately. Now the Bureau wants the consumer to have the choice to deal directly with professional negotiators, without the help of a listing realtor.

The MLS is a service owned by CREA. Realtors across Canada own CREA. We have put together a cooperative, organized to self regulate our industry. By and large the cooperate works very well. We have high standards, look after the needs of the public and provide historical data and exceptional service for the most part. Is there a need to allow the public to be better served by “allowing” brokerages to just act as a processing service to the MLS? The Bureau thinks so, I am sure CREA doesn’t agree.

What has happened to “Free Enterprise” What is wrong with various models developing their own collective to serve their needs? If I want to develop a real estate company which offers a service of listing properties for a fee, with the proviso that the co op brokers must deal directly with the sellers, why don’t I just do it, and let the economy buy or not buy into it.

The problem seems to be that the current collective must allow this model and any other model in by taking away the rule of representation for sellers. There lies the problem. I wonder if I will be permitted to develop my own model, outside of CREA. Will the Bureau come to my defense when I say I have no choice but to be a member of CREA if I want to work in this industry? I doubt it.

For the record, any model works for me. Any real estate brokerage can charge, develop, promote and exists side by side with our firm. The consumer has always had choices, will continue to have choices and will make decisions based on value.

This is a long process and ultimately will develop into what needs to be. Some realtors see their service as a fee, lowest fee wins. Other realtors look at it differently.

8 Responses

  1. Linda Horne

    I am currently a member of 2 boards, The Toronto Real Estate Board and The Orangeville & District Real Estate Board. . Reading the notice that was posted on our board recently regarding the “competition issue with CREA” is quite disturbing to me. First and foremost I see no reason why our private system is being scrutinized by the Federal Bureau of Competition.

    Our service, as Realtors, to the public has been to provide information viaRealtor.ca. This was to be a “marketing” tool. Now it is being used against Realtors….. With the changes recommended by the Federal Competition Bureau I foresee my business will be in jeopardy .

    CREA should be working for Realtors…..the consumer is well protected with all of our rules and regulations…..more is not fair to Realtors. Lobbying must be done to protect the Realtor profession.

    I agree with , Sandra Pratt of RE./MAX Real Estate Center, Orangeville to immediately take our websites Realtor.ca out of order to the public and make it only useable to those who have a real estate license through password only. If the public can no longer go online and get the information they want, they will be forced to call their local real estate agent for services.

    I will be very pleased to see Realtor.ca homepages change to say currently under construction please contact your local real estate representative and bring the industry back to the hands of the Realtors.

  2. Garry Anderson

    We all hated the introduction of buyer representation at one time. We all hated the introduction of MLS.ca and FINTRAC at one time too and when the dust settles on this we will have made one of 2 choices. We looked at this as 1. an opportunity, adapted and succeeded or we were 2. afraid of and resisted the change, probably to leave the industry.

    List for a fee brokerage models already exist. These brokerages don’t do well, because they don’t provide any services and although selling Real Estate seems easy for us old pros, it’s not for the layman. FSBO’s almost always list with a Brokerage.

    The only change I see is removing the “Agency” part of the listing. It’s not CREA that’s the problem, it’s the re-write of all of our Provincial Real Estate Agency law again, that is the problem. This is my main concern. If someone requests that I just “list” the property on MLS, Who’s liable for the content of the listing and other advertising without representation, without a brokerage name on it. There’s a lot of little things that will need tweeking but as long as we have new clearly defined rules and regulations I’m not worried.

    CREA can’t really open up the MLS doors to the public until we set these rules in law though. Also, I see Multiple Listing Service, as a service from Broker to Broker on behalf of a Seller client, not a service for the public but has become a lazy advertising medium via Realtor.ca. MLS.ca and Realtor.ca have single handedly squashed the buyer-only brokerage and those realtors have had to adapt or leave the industry.

    I love big change like this as it usually means less competition, not more. It’s culls the weak and those unwilling to adapt.

    I will be stepping up, discovering opportunities and capitilizing on them. I know my adapted services, either flat fee, partial or full will alway be in demand. I just want to be properly educated and informed on the changes.

    Garry Anderson
    Re/Max Hallmark Realty Ltd.

  3. Linda Horne

    I will adapt to change, and will step up the challenge, again however, I want to be totally informed and educated. I feel that this issue is not being noted by most agents, and needs to be in the forefront of their minds.
    Agency rules may change, and we will provide a great service as FSBO are not “jack of all trades”.

  4. Raj Doobay

    This is the most ridiculous ruling ever. It is akin to saying, “you can hire a lawyer, but you will represent yourself in court, argue against the opposing lawyer/prosecutor, buy you still pay your lawyer your fees.”

    Realtors are no different than any other professional, such as a lawyer, dentist, doctor. Would you puss your own tooth out? No, so why limit the role of the Realtor who is trained to maximise your property value or have a realtor get the best possible deal for you to purchase?

    I am not a realtor, I help realtors to market their properties to European buyers, untill this ruling is cleared up I suggest that Realtors market their properties outside of the Canadian market to sites such as:

    http://www.primelocation.com
    http://www.findaproperty.co

    raj.doobay@tdpg.com

  5. Bill Lafferty

    There’s a saying “penny wise and pound foolish”. And another one “only a fool represents himself in Court” Many do in fact view representing yourself in Court without a lawyer to represent you to save money as not being very prudent. Since the lawyer on the opposing side is experienced and can take full advantage of you due to the fact that you have no legal representation and due to your lack of experience and knowledge of legal proceedings.
    This brings us to what the Competition Bureau is trying to enforce on the CREA. That Sellers will only have to pay a fee to list their property.To save money the Sellers will not have a Listing Agent to represent them in the negotiations but rather they will deal directly with the Buyer’s Agent who is representing and working for only the Buyer.After many years of the Real estate industry putting up safeguards to fairly represent and protect both Seller and Buyer through Agency. The competition Bureau has come up with the idea that in order to save money, that Seller’s can represent themselves and deal directly.Understanding all the terms and negotiate their own transaction with the experienced Buyer’s Agent who is working and representing the Buyer.Is this new one-sided representation for the BUYER ONLY in order to supposedly save some money for the Seller really beneficial for the Seller?I truly believe about as beneficial as the one who represents himself in court to save money on a lawyer. Since in Both cases the one not represented will most likely lose much more than if they had paid for representation. Remember, Price is only one important negotiating factor in a real estate transaction,equally important is pre-qualifying deposit,conditions,terms,chattels,possession date,property inspection, and more!!If the competition Bureau gets it’s way it will impose this “penny wise pound foolish” ruling and undo years of progress DEVELOPED BY THE REAL ESTATE INDUSTRY to EQUALLY protect BOTH SELLER AND BUYER.

  6. Rod Doris

    Almost a year ago to the date I penned the enclosed letter to CREA! At the time, what prompted me to write this letter was an article published in the Toronto Star on Nov 15, 2008, and it was about public access to our MLS data and CREA re-launch of MLS.ca, now called REALTOR.ca.

    [“Messing with our real estate crack; when wildly popular property site MLS.ca was relaunched last month, no one could have anticipated the furious response. Some of the protesters are even looking for a house

    Toronto Star – Toronto, Ont.
    Author: Murray Whyte
    Date: Nov 15, 2008
    Start Page: ID.3
    Section: Ideas
    Text Word Count: 910

    Abstract (Document Summary)
    “Since (the relaunch), we’ve gotten 16,000 emails either complaining or asking for help,” [Bob Linney] sighs. “It’s a service that people get emotionally attached to. We understand that. And it’s been a huge, huge education problem, believe me.
    “”Whenever the MLS site had problems, people got extremely upset,” writes [Kal Leung] from Frankfurt, where he’s on temporary assignment. Leung’s site tiptoes around CREA’s content as best it can; in the past, enthusiastic, computer-savvy users have tried to improve on MLS.ca’s simplicity – and sometimes, lack of information – but CREA has always shut them down, holding fast to proprietary material that it fears might make realtors obsolete. Or so the theory goes.
    “I just wish the data available to the public would be more complete,” Leung wrote. Listings usually reach the internal system, accessed by realtors only, a few days before they’re released to the public; some aren’t released publicly at all. Leung, who posts new listings on a daily basis, is aware of the CREA chilling effect “I don’t want to push the envelope of what the people (at CREA) will ignore.”]

    After reading the article I wrote a open letter (enclosed) to the Directors of CREA, to which I got a generic letter saying that they are receipt of my letter, and thanks for letting know how I feel about their decision to give total access to REALTOR.ca including the property address. This being the last piece information that allows me to get calls from internet savvy potential clients, who have access to everything else.

    An Open Letter to the Board of Directors of CREA

    Hi Ann, Ladies and Gentlemen:
    Given that we have given away all of our rights for the consumer to use us as realtors, it is very apparent that we are now giving the one thing that I use as a means for the consumer to call me as a realtor! CREA has now given FREE access to the general public to all the MLS data including the property address on Realtor.ca. We are also censoring how we are marketing our services by making even the virtual tours on the MLS system generic. This is beyond being absurd. Do other professions do this?
    Why do we as a group have MLS? Have anyone of you given some serious thought to what your actions will do to this industry? The mere thought that you as a board of directors of CREA have voted to allow free reign by anyone; to access almost all the information of the MLS system, there is something fundamentally wrong with the path that this CREA has taken. The MLS system was not created to protect us from the Competition Act; is this real reason behind what you are doing? It seems this way to me, based on your actions. It was not created to give free reign to everyone to use it as they deemed fit! It was created so that members can share their information amongst themselves – period. Why are we as a profession so self-deprecating?
    Have you read your board statistics lately, about the industry, and the tough economic times that we face? Well, I for one disagree with what the Board of Directors of CREA are doing, and I am mad as hell that the higher up, so they think they are, can vote for this change that diminishes the years of education and experience that realtors bring to the table, whereby the general public can dismiss professionals like myself who live and breathe real estate.
    Now, what are you people going to do about this? I am patiently awaiting your response.
    Regards,
    Rod Doris, Broker
    Re/Max Spirit Inc.
    905-623-5661
    http://www.roddoris.com
    http://www.durhamhomes.com
    http://www.oshawarealestateforsale.com

    At that time, CREA directors and local real estate boards’ directors had already done town hall meetings at most real estate boards, about the MLS and REALTOR trademarks, and what it meant to us REALTORS as a profession, now that the Competition Bureau had come calling. My take at the time was that CREA should have gone on the offensive as opposed to the defensive, but either way, I still feel CREA is not listening to their membership! Again, I would like to reiterate that we are the only self-regulated professionals who are dictated to by everyone else but us REALTORS, whom have spent many years of service, self-education, as well as thousands of dollars on our businesses, just to be who we are today – still no recognition, still not considered professional! Now, the Canadian government is till us that we must change the way we do business…

    Finally, it is my observation that there is only a handful of members in this profession who will “try” to circumvent the MLS system for their financial gain. These individuals clearly are disrespectful for the REALTOR hat that they wear, and they do not care about the consumer at all; but to them it is only how much money they can net without having to provide “value” to the customer. Most Buyers and Seller see the value us REALTORS bring to the table, but there is only a few who still won’t pay for it! Their choice!

  7. James (montreal)

    Like I was saying… we never should have let them get rid of Edgar. Being online with Matrix, makes everyone want to have access to our online system. Simply put Matrix is great but, it is not controlable. isn’t webforms amazing, now people & agents don’t even need to know how to fill out contracts, the internet will do it for them.

    FSBO wants MLS

  8. Tom Watts

    Do not list your properties with Primelocation or Findaporperty. You will be ripped off, get shoody service and no leads. These sites do not work!

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