New Ruling Is Bad News For Home Owners Looking To Sell Without An Agent

 

Posted: 05/01/2015 6:55 pm EDT Updated: 05/01/2015 6:59 pm EDT
 
 
 
 

A push to make it easier for potential home buyers to see sellers' contact information online has been rejected by Canada's Competition Tribunal.

It's a setback for Canadians looking for a more do-it-yourself approach to real estate. The ruling, released Friday, said that the Canadian Real Estate Association's (CREA) current restrictions on the amount of information low-fee agents post on their popular realtor.ca website or any website that links to it are fair and do not contravene competition regulations.

The decision is the latest development in an ongoing dispute between the country’s competition watchdog and the realtors' association over the group’s restrictions on public access to information. The Competition Bureau says the rules promote the traditional commission-based way of doing business at the expense of consumer choice and flexibility.

Low-fee brokers who allow customers to pay a flat fee for a “mere listing” on the CREA-owned Multiple Listing Service, where 90 per cent of the country’s real estate transactions take place, have gained popularity over the past few years. It started when the bureau forced the industry to open the door to more alternative ways of doing business for those who opt to sell their homes privately rather than pay a realtor's typical five per cent commission fee.

In 2010, the competition watchdog and CREA signed an agreement allowing flat fee listings. However, the industry body, which oversees some 100,000 real estate agents, quickly brought in new rules banning agents from posting seller’s contact information, which would have allowed buyers to contact sellers directly, without the need for an agent. The watchdog says those rules violate the terms of the settlement.

As a result, DIY agents created “buffer pages” that click through to another site in order to see seller contact information, a move that some complained was a waste of consumers’ time.

The tribunal, a court that regulates competition laws and practices, dismissed a complaint from one of those agents Thursday.

“The Tribunal is not satisfied, on a balance of probabilities, that the Rules discriminate against members who offer mere postings,” it concluded.

The watchdog is also locked in a battle with the Toronto Real Estate Board, the largest in the country, over restrictions that require would-be buyers to get home sales information directly from an agent.

The Competition Bureau targeted the Toronto board because it will have the greatest impact on consumers. The outcome of the case could shake up the entire industry, the way a similar case against CREA’s U.S. counterpart opened the information floodgates in that country.

After years of fighting over real estate agents’ right to post in-depth MLS information on their own websites, the U.S. National Association of Realtors and the Department of Justice reached a settlement in 2008.

It paved the way for a new era of buying and selling homes in the United States. Now sites such as Zillow and its recently acquired competitor Trulia allow consumers to do much of the initial searching by themselves.

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