A 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.