When a Salesperson is representing a product, whether it be a suit of clothes or a house, they are acting under Agency and their fiduciary duty belongs to the party paying for their services unless they have a contract that says otherwise. If you walk into my Open House and ask me questions about the property, like “what will they take?”, it is my duty to tell you that “they will take the asking price.” 

I’m not trying to be smart or glib, but the seller has signed a contract with me and the Company, to sell the property at a price they have chosen under the listing agreement. My duty to counsel is to the Seller, not the Buyer….

If I enter into a Buyer Representation Agreement with the Buyer then, I can offer counsel to the Buyer. I can give information about recent sales in the area, market conditions, my thoughts on the market etc. but only when a relationship has been established in writing between the parties, much as a Listing Agreement sets out the relationship with the Seller and their agent.

There are times, of course, when Multiple Representation occurs. That happens when a property listed with my Company is of interest to a Buyer under contract to our Company.  An open discussion can be held with the exception of two major areas:

1. If I know what price the Seller would accept or the Buyer will pay, I cannot share that information….
2. If I know the motivation for the Buyer or Seller in Buying and Selling, I cannot share that information…

Those are the two restrictions…and must be adhered to under Representation or Agency.

Recently, the Toronto Real Estate began a campaign to try to explain Representation and the need for Buyer Representation especially to the consumer and their Realtor. You can check it out at  www.BRAFirst.ca.

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.

Related Posts:

Canadian Real Estate: Lack of Inventory Puts Upward Pressure on Pricing.

Canadian Real Estate Association Releases New Update

Related Posts:

Canadian Real Estate Association Releases New Update

Here is the latest market report from the Canadian Real Estate Association. Take a look at the highlighted portion below as it points to a striking lack of inventory for Purchasers…but means it is a great time for Sellers to put their homes on the market. From my understanding, in a “Normal” market the inventory is about six months.

OTTAWA – October 15th, 2009 – National resale housing activity climbed to the highest level of any third quarter on record. Actual (not seasonally adjusted) home sales via the Multiple Listing Service® (MLS®) Systems of Canadian real estate boards totalled 135,182 units in the third quarter of 2009, according to statistics released by The Canadian Real Estate Association (CREA). This is the highest level of activity on record for the period from July to September. The number of transactions was up 18 per cent from the third quarter of last year, representing the biggest year-over-year increase since early 2002. 

Seasonally adjusted national MLS® home sales numbered 127,941 units in the third quarter, up 12 per cent from the previous quarter. Building on two previous quarterly increases, seasonally adjusted MLS® home sales activity now stands 48 per cent above the low reached in the fourth quarter last year. 

“Momentum for sales activity remained strong throughout the third quarter,” said CREA President Dale Ripplinger. “Low interest rates, rebounding consumer confidence and an improving overall sense of economic security continue to draw homebuyers to the housing market.”

 Seasonally adjusted sales activity in the third quarter was up from the previous quarter in over 80 per cent of local markets. Quarterly activity increases in Vancouver (34 per cent), Toronto (11 per cent), and Calgary (19 per cent) contributed most to the national increase in activity. Some 42,958 homes traded hands via the MLS® Systems of real estate boards in Canada in September 2009 on a seasonally adjusted basis. This represents an increase of 1.5 per cent from August, and lifts seasonally adjusted activity 63 per cent above the low in January. 

Actual (not seasonally adjusted) MLS® home sales activity remained strong throughout the quarter. Resale activity in September 2009 posted the fourth consecutive increase from year-ago levels, all of which exceeded 15 per cent. Sales numbered 42,497 in September, up 17 per cent year-over-year and a new record for the month.

 Year-over-year activity increases in Toronto (28 per cent) and Vancouver (124 per cent) were the driving force behind the increase in actual (not seasonally adjusted) national sales activity in September. Climbing to $327,736, the national MLS® residential average price rose 11 per cent from the same quarter last year.

The national average price continues to be skewed upward by a sustained increase in sales activity, including a sharp rebound in activity at the higher end of the price spectrum, in some of Canada’s priciest markets. The national MLS® residential average price surpassed all previous monthly levels in September 2009, rising 13.6 per cent year-over-year to $331,602. July and August also posted new average price records for their respective months. A number of provinces set new average price records for the month of September, and Ontario posted the highest average price on record. 

The price trend is similar but less dramatic for the weighted national MLS® average price, which compensates for changes in provincial sales activity by taking into account provincial proportions of privately owned housing stock. The weighted national MLS® average sale price was up 9.3 per cent year-over-year in September 2009.

 On a seasonally adjusted basis, the supply of homes coming onto the MLS® market edged up in the third quarter after four consecutive quarterly declines. Seasonally adjusted MLS® residential new listings were up one per cent from the previous quarter to 199,824 units. The increase reflects a quarterly rise in the number of new listings in British Columbia and Ontario, Prince Edward Island, and Newfoundland & Labrador. New listings remained stable or continued to retreat in other provinces.

 While the small rise in seasonally adjusted new listings suggests that the number of homes coming onto the market may soon begin to edge higher, the number of new listings remains well down from year-ago levels. Barring a sudden unforeseen spike in levels, new listings are likely to remain down from year-ago levels for some time.

 Actual (not seasonally adjusted) new listings were down 12.5 per cent compared to the third quarter of 2008 after posting year-over-year decreases in each of the previous quarters. Newfoundland & Labrador is the only province in which new listings were up from year-ago levels. An increase in sales activity and fewer new listings are drawing down inventories compared to year-ago levels. There were 208,215 homes listed for sale on the MLS® Systems of real estate boards in Canada at the end ofSeptember 2009, down 16 per cent from a year earlier. This is the fifth consecutive year-over-year decline in active listings, and the largest decline in more than six years. 

Nationally, the number of months of inventory was 4.9 months in September 2009. This is down slightly compared to August, and remains well down from the recessionary peak of 12.8 months in January 2009. The number of months of inventory is the number of months it would take to sell current inventories at the current rate of sales activity.

 The seasonally adjusted residential dollar volume for MLS® home sales increased 20 per cent on a quarter-overquarter basis to $42.1 billion in the third quarter of 2009, the highest level on record. New provincial records were also set in British Columbia and Ontario, which propelled the national figure to a new high. 

“Monthly sales activity remained on a strong upward trajectory throughout the third quarter in British Columbia, while showing signs that it may be topping out in other provinces,” said CREA Chief Economist Gregory Klump. “On balance, this suggests that national sales activity may be starting to plateau after having climbed rapidly earlier this year.” 

“Headline average price increases over the rest of the year are expected to prompt sellers to return to the market after having retreated to the sidelines late last year and earlier this year,” he added. “An increase in new listings will help keep a lid on price increases. Price increases over the rest of 2009 and early next year are likely to reflect declining average prices late last year and earlier this year.” 

PLEASE NOTE: The information contained in this news release combines both major market and national MLS® sales information from the previous month. The Canadian Real Estate Association has previously released these separately. CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighborhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types. 

MLS® is a co-operative marketing system used only by Canada’s real estate Boards to ensure maximum exposure of properties listed for sale. The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations,representing more than 96,000 REALTORS® working through more than 100 real estate Boards and Associations. Further information can be found at www.crea.ca.

OTTAWA – August 27, 2009 – MLS® home sales were much stronger than expected in the second quarter of 2009, with activity having climb throughout the quarter and into July. The remarkable recovery of resale housing has prompted a change to the MLS® home sales forecast issued by The Canadian Real Estate Association for 2009 and 2010.
The speed and magnitude of the rebound in sales activity to date has lifted CREA’s national forecast for the number of transactions to 432,600 units. This represents an annual decline in activity of 0.4 per cent compared to levels set in 2008, and is a significant upward revision from the previously forecast decline of 14.7 per cent in CREA’s forecast issued last May.
“Sales activity started off the third quarter on a strong footing,” said CREA President Dale Ripplinger. “The difference in the resale housing market now, compared to the beginning of the year, is night and day, and nowhere is this more evident than in the West.”
British Columbia and Ontario are now forecast to post annual increases in activity this year, reflecting weak demand last year and a subsequent rebound. Forecast declines in annual activity were trimmed significantly in Alberta, Saskatchewan, and Quebec, and were also shaved for New Brunswick and Nova Scotia.
National MLS® home sales activity is forecast to rise 5.3 per cent to 455,400 units in 2010. This is a smaller rise in activity than previously forecast. “Low interest rates are boosting sales by returning homebuyers to the market who moved to the sidelines late last year, and shifting ” said Chief Economist Gregory Klump. “Buyers are also shifting purchase decisions forward as they take advantage of attractive interest rates now before financing costs increase.”
New listings have been edging down from record levels, with many sellers taking their home off the market pending an improvement in housing market conditions. Average price increases in the second half of 2009 are likely result in a mild rebound in listings in 2010.
The national MLS® average home price is forecast to edge up 1.5 per cent in 2009, as the strong rebound in sales activity, not price, in some of Canada’s most expensive markets continues to skew the national, and some provincial, average prices upward. Alberta is the only province with a forecast decline in average price in 2009 (-4.4 per cent). Average prices are forecast to rise in all other provinces except British Columbia, where average price in 2009 is forecast to remain stable. CREA’s previous forecast predicted a decline in the national average price of 5.2 per cent in 2009.
Average prices are forecast to stabilize over the rest of 2009 and into 2010, but weak results in the first quarter of 2009 will result in a lower annual average price this year compared to 2010. The national average price is forecast to be up 2.1 per cent on a year-over-year basis in 2010.
The price trend is similar but less dramatic for the weighted national MLS® average price, which compensates for changes in provincial sales activity by taking into account provincial proportions of privately owned housing stock. The weighted national MLS® average price is forecast to climb 1.4 per cent in 2009, with a further 1.7 per cent rise in 2010. CREA previously forecast that the weighted national average price for MLS® homes sales would hold steady from 2009 to 2010.
“The speed with which the Canadian resale housing market has rebounded is unprecedented,” said Klump. “The economic recovery is expected to be slow and protracted, so the dramatic swings in activity seen in late 2008 and this year are unlikely to be repeated in 2010.”

Related Posts:

Canadian Real Estate Association Posts Best July on Record

REALTOR.ca and why it is not an MLS System.

CREA Issues Strong Report For Canadian Real Estate.

National resale housing continues to rise in May

The reason for the name change was to help ease some of the confusion in the minds of Canadian consumers who thought that what they were seeing was an MLS system. Those systems are owned and operated by local Boards/Associations and only upload certain data that the local Multiple Listing System decides to upload from data given to them from listings contracted with local Real Estate Brokers. Sellers also have options of what can be displayed on the Internet.

A lot of consumers however feel that what is displayed on the public web site is up- to-date and accurate to the minute information…all the information. Please remember that Realtor.ca is only an advertising site drawn from information posted by the local Board, posted by information by the local Broker.

When your Realtor tells you that a property is on MLS they are referring to a password and authenticator access site that has a goal of having all the information needed to draft an “Agreement of Purchase and Sale”. Because the information is of a private nature, Boards and Associations have added safeguards to stop non member access and non-member distribution of the data collected during the selling process, only uploading agreed upon data to advertising vehicles.

In Today’s full access environment it is hard to keep all parties happy. In the meantime please remember that REALTOR.ca is a GREAT public-facing web site used to advertise properties but not an Multiple Listing System (MLS). For full information you should have a representation agreement signed with a Realtor whether it be a Listing Agreement or Buyer Representation Agreement.

A few years ago the Toronto Real Estate Board expressed a concern about the branding of the public-facing Listing site used nationally MLS.ca. The concern was a confusion in the Public that they were accessing an agent-to-agent Multiple Listing System that had all the information rather than a marketing product. It took a couple of years but the decision was made by the Canadian Real Estate Association almost one year ago that the better brand would be REALTOR.ca.

At the same time, it was decided that the re-launch should include interactive mapping provided by Microsoft Virtual Earth. The site was run concurrently with MLS.ca this past summer and since its launch there have been many complaints and many changes. Most of the complaints centre around a few issues; interactive mapping takes some getting used to and some of the Boards and Associations across Canada upload with different software, some of which does not retain the longitude and latitude of each property. Some Sellers, Boards and Associations do not want their addresses viewable on Public web sites.

All this being said, what is emerging is a pretty cool web site that is still upgrading as it’s potential is being explored more and more. I’d be interested in seeing your comments as the changes are implemented so keep checking back and feel free to comment.