What Happened in 2010 With Regard to Real Estate Services?
Late last fall, the Canadian Real Estate Association (CREA) and the Competition Bureau reached an agreement on a long-standing point of discussion. The agreement means that all listings on Real Estate Boards must be posted by a member of organized Real Estate (a REALTOR® who is a member of a local Real Estate Board) and that listings cannot be posted directly by a Seller.
The Seller can choose to use a REALTOR® for the purposes of merely posting their listing, and can further choose not to use any other services provided by that REALTOR®. This kind of posting is being referred to as a “Mere Posting”. In summary then, a “Mere Posting” is an MLS® Listing that appears on the MLS® system where the REALTOR® has chosen or agreed not to provide services to the Seller other than submitting the listing for posting on the MLS® system.
Why Will Some Sellers Choose To Have Their Listing Merely Posted?
The answer is simple – they believe they will save money.
For example, when a full service Brokerage posts a listing on the MLS® system, the commission negotiated between Seller and the Brokerage and paid on closing is split between the Brokerage that lists the property and the Brokerage that sells the property. Sellers who choose to have their property merely posted will only pay a fee to the REALTOR® for the purposes of merely posting their listing. This fee in most cases will likely be less than commission.
What Are The Disadvantages to a “Mere Posting” For The Seller?
If your property is merely posted, you could be faced with dealing directly with both REALTORS® and the general public for appointments to show the property, for information including electrical, sewage treatment systems, renovations, official documents such as Building Permits, Septic Use Permits, Water Well Records, Tax and Assessment Notices. REALTORS® know how to get these documents. Do you?
Do you want to give this potentially personal information out to an unrepresented Buyer (a Buyer not working with a REALTOR® under a Buyer Agency Agreement)?
Do you want to let a complete unrepresented stranger into your home?
Are you able to leave work at a moment’s notice to show an unrepresented Buyer your home?
Do you wish to deal directly with an unrepresented Buyer in the negotiation process?
Did you know that a REALTOR® is bound by a Code of Ethics including rules requiring disclosure, honesty and fairness, and is bound by specific fiduciary duties. The unrepresented Buyer is not bound by these rules.
Why Use a Full Service Brokerage?
Know the local market and can provide you with a full set of historical comparables in order to achieve the highest selling price for your property within a reasonable period of time you.
Are bound by a Code of Ethics and accountable for the safety of your property and belongings while showing your property. Using a REALTOR® can reduce the risk of theft.
Can show your property at a moment’s notice, day or evening. Showing your property is inconvenient. Buyers call day and night and ask to see your property on their timing, not yours. Can you leave work to come home to show your property at a moment’s notice?
Qualify and pre-screen buyers to ensure they have their financial ducks in order. Do you have the tools and knowledge to undertake this?
Pre-screen buyers for security purposes. Do you want a complete stranger in your home?
Provide a lockbox to enable access to your property to licensed REALTORS®. If you choose a mere posting, you must arrange for access for the Buyer at their convenience.
Provide signage. If you choose a mere posting, you must arrange for your own.
Display your listing in their office foyer and their satellite offices in the local area and provide information on your property. Where will your mere posting be displayed and at what cost?
Advertise your listing in local papers. Where will you advertise? If you choose to merely post you will bear these marketing costs.
If you have chosen to merely post your listing and are not paying a Selling commission and if my Buyer does not agree to directly pay me a Selling commission for your property, it is extremely unlikely that I would show your property. I am a licensed professional who earns my living through successful trading in real estate. Why would I invest my time to sell your property if I am not being paid?
Why should Buyers work with a REALTOR® rather than approaching a Seller directly?
REALTORS® can show you more than one listing and therefore maximize the number of properties viewed in the shortest time period.
REALTORS® know the market and have access to historical sales information and can therefore advise you as to the value of a property.
If you purchase directly from a Seller, they are not bound by a Code of Ethics that includes honesty, fairness and due care and do not have to disclose that an unnatural death (suicide) took place on the property. A REALTOR® must disclose all material facts.