Thursday, September 30, 2010

REALTORS® cave

Recognizing they're bringing a butter knife to an aerial dogfight, the CREA (umbrella organization of Canadian REALTORS®) have agreed to step down from the shoving match and accept the fact they've been running the MLS® system in an anti-competitive manner:
In a development that could drastically change the way Canadians buy and sell their homes, the real estate industry has reached a landmark agreement with federal competition authorities.
The legally binding deal will allow for home sellers to pay for only those services they want from their real estate agents. Previously, under the rules established by the Canadian Real Estate Association (CREA), consumers had to opt for an entire slate of services, a practice the Competition Bureau deemed anticompetitive.
Says one lawyer who wanted to access the MLS® system without acting as a full-service REALTOR® for his clients: 
“This is precisely what I’ve been fighting for for the last decade,” he said. “That the consumer and real estate agent get to decide the framework of their relationship without having CREA and their local boards say certain arrangements are not appropriate for MLS.”
It's still early in the big schemes of this new development. But two things remain: the CREA's claims against the Competition Bureau regarding agency weren't strong enough for the CREA to spend money defending and the Competition Bureau didn't feel it necessary to push the CREA to allow non-REALTOR® access to MLS® listings. Simply put, as far as I can tell, you'll still have to use a licensed REALTOR® to list your home on MLS® and that REALTOR® will still have the option of not charging a flat rate or simple MLS® listing fee if said REALTOR® believes they can make a living without offering that basic service. 

Time will tell, along with the details of this new agreement, but I'm not sure this development creates the conditions necessary for drastic change in the way Canadian consumers buy and sell homes.

8 comments:

Mark said...

Competition Bureau = Bunch of Pussies!

What a joke.....

omc said...

Whats the call people? I predict 345 for sales with listings at 4150.

Leo S said...

Significant decline in listings on my PCS in the last few days (under 550k SFH in Victoria and area). Half sold, half off market.

Marko said...

This is worse than I thought. Inventory continues to pile on, this time of the year it should be starting to drop off. For the SFH average we will have to wait for the public release, but the Mason property and a few others brought it down below 600k for the month.

This is going to be a long winter for sellers.


Month-End Market Statistics
Posted by
Oct 01 2010
Friday October 1, 2010 8:30am:

Sep Sep
2010 2009
Net Unconditional Sales: 395 776
New Listings: 1,211 1,129
Active Listings: 4,323 3,419

Please Note

Left Column: stats for the entire month from this year
Right Column: stats for the entire month from last year

Marko said...

Hmmm, trying to find sales by month from 1990 to 2000 to see if this infact is the worst september in 20 years.

reasonfirst said...

Anyone understand how this will affect the buying agent commissions?.

Marko said...

Buyers' agents who actually offer expertise and services for buyers will be able to obtain Exclusive Buyer Agency Agreement. This will protect them from owners placing their homes on MLS with $1 as the Coop Broker Commission (Buyer's agent commission).

Those who cannot obtain Exclusive Buyer Agency Agreements will avoid listings without "fair commission" like the plague.

I intend to adapt and develop a new flat fee model if necessary.

I.E. I work for $3000 to $5000 depending on your needs via an Exclusive Buyer Agency Agreement. If the commission is $20,000 I give you back $15,000 to $17,000, if the commission is $1 you pay me $3000 to $5000 or we try to get it out of the seller during negotiations.

Few will be willing to adapt initially.

Marko

reasonfirst said...

Thanks Marko,

I think your approach makes some sense.

I would like to see how they "avoid" those homes with $1 commission if the buyer wants to see it/make an offer?

This should be interesting.

r