A long and drawn out battle between the Canadian Real Estate Association (CREA) and the federal competition bureau has ended. The competition bureau has long accused CREA, who owns the Multiple Listing Service, of maintaining a monopoly by limiting access to the MLS to full service real estate companies.
The rules have now ‘changed’. Under the new regime, Canadian home sellers will still have to retain the services of a realtor to list on th MLS but will be able to do so for a flat fee. The CREA has agreed not to deny or discriminate against realtors who offer only posting services. As far as I can tell, this is nothing new – discount brokers have been listing properties on the MLS for years??
As a realtor, I am all in favour of al a carte services for home sellers; the industry has long had ‘no standard fee’. My opinion is that the ‘general’ fee that is charged to the seller (7% of the 1st $ 100,000 and between 2.5 to 3% of the balance) has been arrived at by the action of the free market. The seller understands that approximately half of this fee will go to another agent for bringing in a qualified buyer. The buyers agent is prepared to put in the effort to help clients find a home because they get paid a commission to do it. This makes for an efficient market, too efficient apparently.
In Canada, around 90% of successful real estate sales happen via the MLS system and there’s good reason for that. Once again I fully support a la carte services where consumers can choose what they want to pay for. These days we have access to discount everything, cars, food, stock trades and even legal services. Why should real estate be any different? The answer is it shouldn’t. That being said, consumers must clearly understand the inter-connectedness of service and value.
As far as I can see, the real estate mls modus operandi is not about to change anytime soon. The MLS system works because it provides value to Canadian home sellers and buyers. Those that want to ‘take advantage’ of the MLS but don’t want to pay for it are going to be sorely disillusioned – but then that’s discounting, you get what you pay for.
On the topic of monopolies I wonder whether Melanie Aitken and her team are planning on taking a look at fatcat ICBC’s position in the Canadian market place? Oh no wait, they’re federal aren’t they, that would be a conflict of interest……
I am a Vancouver realtor and mortgage broker who has been in the real estate industry for 12 years. My formal education includes a Bachelor’s of Commerce from the University of Natal and a diploma in Urban Land Economics from UBC
I enjoy many outdoor pursuits such as fishing, surfing, kayaking, windsurfing and camping.
Vancouver is a great place to live!
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