Buying a home is a lot different than buying an airline ticket. Yet if you have read the complaint by the competition bureau against the CANADIAN REAL ESTATE ASSOCIATION ( CREA), you would think it is that simple to buy or sell a home in Canada today, by just using the internet for support. Unfortunately, it is not that easy.
Accordind to the bureau, CREA and its member real estate boards effectively control the market in Canada , since 90 per cent of all residential home sales are completed using the MLS systems, and consumer thus have no real choice in paying commissions, which, according to the bureau , is usually 5 % of the sale price. It is further claimed that the rules passed by CREA regarding use of thede systems prevent anyone from offering different service models, thus eliminating choice for consumer. They would like every seller and buyer to have access to the MLS system , and be abble to and buy properties themselves, without the services of a real estate broker.
No statistics are introduced by the bureau to support any of these claims. The fact is that there are are other alternatives for Canadian consumers today, both within the MLS systems and outside it. There are many for sale by owner websites gaining market share across canada , offering a flat fee service to sell your home. These include Com Free in Western Canada, Grape Vine in ottawa , Duproprio.com in Quebec and many others who participate in the National FSBO network.
Even within MLS, there is no set commission and consumers can negotiate directly with their salesperson. There are many exemple across Canada where salespeople and brokerage companies charge less than 5% commission including flat fees. Now that CREA has introduced changes that permit sellers to post their listings onto MLS through a Realtor and not use a broker for any other service, we will see even more business models introduced by salespeople going forward , again offering more choice to consumers. In my opinion , there is real danger to consumers in trying to buy or sell their homes without the advice of a real estate professional . Sellers will not know HOW TO QUALIFY buyers who attempt to tour their home, will not understand how to properly price their home for sale and will not appreciate their obligations of disclosure of defects to unwary buyers. This will result in sellers not obtaining the maximum sale price for their homes and potentially involve them in unnecessary lawsuits from buyers.Buyers will not know if the seller has any authority to sell the home or whether the property is in fact in the process of being taken over by the bank. Deposits could thus be fraudulently misappropriated .
To try and understand the Bureau’s position , let’s say a company bought a 100 acre lot and started selling cars, each one inspected and by their certified technicians and advertise across Canada. The company was very succesfull. Buyers trusted them. Now a private car seller finds out that they cannot nearly the price or exposure by selling themselves. Should that person be able to go to government and demand that he be put on the succesfull seller’s car lot , with the private seller’s name in the windshield , selling is own uncertified car to the public ????
In a sense, this is what the bureau’s is asking regardling the MLS system, wich has been built, paid for and maintenaed by Realtors , to provide Canadian with the widest exposure , security and protection when buying or selling their home across Canada. When you buy an airline ticket on the internet , it cost you about 100$ if you change your mind. If you make a mistake in the largest purchase descision of your life, it may cost you tens of thousands , and unecessary legal headaches.
Now that there are new MLS rules in place, my advice to the bureau and CREA is to take some time to monitor developments over the next year, before rushing to trial, where only the lawyers win !
By Mark Weisleder ( Canadian Real Estate Magazine , august 2010 issue )
Here’s the link to the original publishing of this article: http://montrealbroker.wordpress.com/2010/08/17/competition-bureau-misguided-about-mls/





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