The Canadian Real Estate Association (CREA) is being asked by the federal Competition Bureau to take down the walls around submitting data to Realtor.ca - the site of the Multiple Listings Service (MLS) built and run by organized real estate in Canada, at their substantial cost and effort, over the past decade.
CREA has said they will not throw open the doors for anyone and everyone to list on Realtor.ca. The association stated in a press release this week that "the MLS system is a system for Realtor members of CREA."
Some discount brokerages say they're being barred from listing on Realtor.ca. In fact, if they are members of a board, they can submit their listings the same as the real estate professionals who list at Realtor.ca now. All the discount brokers have to do is comply with the rules and regulations of the local real estate boards, the same rules followed by realtors whose listings currently appear on the MLS site.
The Competition Bureau is proposing to reduce the level of mandatory requirement of service needed to load listing data to MLS boards. The Bureau has asked CREA to change current rules such as a licensed realtor must act as an agent for the seller through the entire time of the listing contract posted on MLS, and the listing realtor receives and presents all offers to the seller.
What this would mean is that someone can set up a business, at little cost, and charge consumers a small fee to provide their listings directly to local real estate boards, which would then post the data on Realtor.ca. As I told The Globe and Mail this week, the real question is, are we moving to have a for-sale-by-owner service funded by the real estate industry?... I don't see that happening. And, clearly, neither does CREA.
Roots in Internal Data Sharing
A little history: Decades ago, real estate boards across Canada acquired a data sharing system and created the Multiple Listing Service. Licensed real estate professionals had to be members to share this data. Then in the '90s, some boards - through the CREA relationship - got together and made a decision to create a consumer site, MLS.ca where they would share some data from cooperative boards. That website started with only some real estate boards as members, and has expanded over time.
Today, virtually all real estate boards in Canada provide data to the current version, Realtor.ca. Listing information does not appear in full form at Realtor.ca, the way it does on internal MLS shared data between licensed realtors as members of the boards.
The outcome of this dispute has huge and negative implications for the real estate industry. I believe these issues are a result of organized real estate taking steps to deal directly with the consumer. When the listing data was kept between licensed members of a board, this problem did not exist. As soon as the industry opened it up and started to deal directly with consumers, these issues arose.
I don’t know how we “unwind” this history, nor what the middle ground would be between the CREA position and what the Competition Bureau wants to see happen. I do know that the MLS infrastructure and everything that has been created has been paid for by organized real estate over many years.
This issue has been under investigation by the Competition Bureau in Canada since 2007 (even earlier in the US by the Anti-Trust division of their federal Justice Department).
I am watching closely what develops in this case; I sincerely hope that CREA and the Competition Bureau can come to a resolution without litigation.