Lately, there has been a great deal of information from national news with regards to the Competition Bureau’s desire to commence legal proceedings against the Canadian Real Estate Association (CREA) basing this claim on anti-competitive practices by CREA, according to the Competition Bureau.
First, we need to explain that CREA is the owner of the MLS (Multiple Listing Service) and represents more than 98,000 licensed Realtors across Canada. While anyone can sell their home on their own, having a listing on the MLS is seen as an integral part of achieving the best end result as MLS listings account for more than 90% of the sales vs. the average 10% in sales by other business models. There is no question that the Internet has changed the way prospective homebuyers look for properties and keeping this search under one system just makes sense. Why are we privileged to have such an effective system in Canada? Because CREA has closely guarded this system, ensuring that all licensed Realtors adhere to strict rules and regulations, providing legal and accurate information FOR the protection of the consumer.
In comparison, buyers in other parts of the world need to stay vigilant, follow several real estate websites, making the search process confusing, inaccurate and time consuming as they are not as closely guarded & regulated by an entity.
The primary objective of the Competition Bureau is not the reduction of the Real Estate fees. Their aim is for CREA to remove the Agency aspect of the posting criteria, permitting consumers to post on MLS, still through a licensed Realtor, offering a cooperative brokerage fee, BUT with the ability to ”opt out “of the Agency representation and only pay a flat fee (low cost alternative with limited service). This act in itself may cause some serious legal problems, for example when a willing seller gives involuntary inaccurate or wrongful information about the property to a potential buyer when handling showings & negotiations.
Time will tell if such proposed business model will prove to be effective and viable. For now, most consumers still choose the traditional “ full service” business model that includes a Realtor’s Agency Representation. They understand the value behind the knowledge, experience and peace of mind that a Realtor brings to the table, after all, a home is the consumer’s most valuable asset.
At the end of the day, if I had to choose the professional services of a cabinet builder or build them myself by borrowing his/her tools, I would still choose a professional and enjoy the greater benefits of a well built & beautiful kitchen.
Sincerely, Ingrid. Questions orcomments? Please contact me, I’d love to hear from you!
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