Globe and Mail: Home listings to undergo overhaul - Changes planned in order to satisfy concerns that real estate association discouraging competition

Tuesday, Nov. 03, 2009 - Wesley Brown was so sure his Calgary home - with its "spacious working kitchen and extremely large yard with soothing pond focal point" - would sell itself that he didn't bother to hire a real estate agent.

Two quiet weeks later, he realized he'd made a mistake using only a "for-sale-by-owner" website. Without an agent, the property couldn't appear on the Multiple Listing Service - an Internet service owned by the Canadian Real Estate Association that is responsible for about 90 per cent of all home sales in Canada.

The four-bedroom house is now for sale through an agent, with an asking price set at $529,000. It's close to what he was asking, but he'll make less since he'll pay a commission to his agent. With a typical 5-per-cent fee, it means $26,460 less in his pocket.

"It's a real numbers game, and that listing becomes really important if you're going to get the eyeballs you need to get near your price," he said. "It's really hard if you're not on MLS."

The numbers game is about to change a lot more.

After a two-year investigation from the Competition Bureau of Canada, CREA is planning a major overhaul of its listing system in order to satisfy the Bureau's concerns that the real estate association is discouraging competition. CREA is under pressure to give more access to MLS to small real estate services and individuals looking to sell their properties. The move would give consumers more choices on how to buy and sell homes and lower costs as discount realtors emerge and cut traditional agents out of the process.

"The Bureau is concerned that CREA's rules have restricted consumer choice and limited the scope of alternative business models," CREA president Dale Ripplinger wrote in a weekend memo to his association's members. "Unfortunately, the Bureau seems to believe that CREA's rules ... create restrictions and barriers."

What's at stake is a decades-old way of doing business in real estate, and a lot of money. In 2008, sales on the system hit $132-billion, according to the CREA, generating about $6.6-billion for real estate agents assuming a typical 5-per-cent commission.

Critics maintain the realtors hold a monopoly on the market and its data, and are discouraging innovative new services from forming. Industry insiders maintain it's a system they've paid to develop and maintain - not a public utility - so they should be allowed to do what they want.

Click here to read the full article

Marlene Ofter

Marlene Ofter

Certified Real Estate Broker
CENTURY 21 Max-Immo
Contact Me

Blog Archives

Tags