My week began as usual with a coffee and a look at the newspaper headlines. A story in the Star about changes to the business of Real Estate to be imposed by the Canadian Competition Bureau had many in our industry buzzing by the end of the day.
The story falsely reported that a settlement between the Competition Bureau and CREA was reached that effectively would open the MLS® system (Realtor.ca - MLS.ca) to the public and it would no longer be a member-to-member system as it has been since its original inception by the Canadian Association of Realtors.
CREA has not reached a settlement with the Competition Bureau and CREA has not changed its MLS® Rules and Interpretations. The papers had it wrong. So much for journalistic integrity.
The Competition Bureau did requested that changes to certain Rules and Interpretations that deal with the acceptance of mere postings on Board MLS® Systems (i.e., where the agreement between the listing agent and the seller is that the listing agent will not provide services other than listing the property on a Board’s MLS® System). The Competition Bureau has said that if CREA does not remove these restrictions the Commissioner of Competition will initiate an application before the Competition Tribunal, which is a quasi-judicial body that can, among other things, make orders requiring or prohibiting certain conduct (e.g., requiring rule changes).
CREA is reviewing the request and any decision will have to meet the approval of its membership which includes all registered Realtors in Canada.
The concerns expressed by Realtors I have spoken with should the MLS® system be thrown open are justified.
Firstly as the system functions now all listings and their data undergo a high level of scrutiny to assure its integrity. If any and all persons were able to submit without this scrutiny the value of the service would not be possible and the courts would be filled beyond capacity from St. Johs to Victoria with buyers and sellers where properties were intentionally or accidentally misrepresented.
Second, it must be remembered that this system started as a paper catalog to allow the public and other agents to see the homes we list for our clients without having to drive up and down every street looking for signs on lawns. It naturally progressed to the Internet much like Sears or Canadian Tire stores have done with their catalogs. Ask yourself how foolish a ruling it would be if the Competition Bureau demanded that either of those stores allow you to post your garage sale items.
Another myth that the media has propagated this week is that Realtor fees are monopolized. This is completely untrue. Every person has the right to negotiate a fee that both parties can agree to. If an agreement can not be reached, there are no shortage of Realtors available to repeat the negotiating with until you are satisfied.
Something to keep in mind is that the agent pockets a much smaller portion of that fee than most would think and uses his/her portion of that fee to advertise your house. A listing costs the Realtor $1000 on average to list for a 90 day term whether it sells or not. A majority of owners who over price their homes will choose to change Realtors over properly adjusting their price.
Blame the game, not the player for the expenses involved in the business of Professional Real Estate sales. Those costs are what they are, the part you are negotiating is the agent's profit. You are hiring them as much for their negotiating skills as their knowledge of the business. Just the fact that you have read this far separates you from the herd. Here then is an important rule of thumb every seller should, but few ever consider. If the Realtor you are interviewing for the job of selling your home can't even protect their own income in negotiating with you, are you confident they can negotiate the best possible dollar on your home? Don't sell yourself or your Realtor short.
For the time being and given all I have learned this week, it will be a long time if ever before any bureaucracy forces the MLS® system from the reliable data base it is today into being a bulletin board with no accountability.
That is a victory for our industry only because it is a victory for the public. What the events of this week did do was give me and other Realtors an opportunity to hear the concerns and assumptions of the public about the business of Real estate.
Many posted stories on online forums about selling their home themselves and saving the commission fees.
Those who wish to sell their home without the representation of a Realtor are free to do so in Canada. There are private companies that for a fee will put your home on their websites and there are multiple media sources online and in print that will accommodate your advertising.
A little better than half the time a sale will go through without issues, The time it takes to sell private over through an agent is reduced in a heated market such as the Greater Toronto Area continues to experience. Those that did have a successful self sale can appreciate the investment of time and diligence required but what those who do hire a professional are more importantly paying for is the assurance that the deal will go off with little or no hitches or legal challenges and the proficiency and protection that is there should things not go according to Hoyle.
Much like an insurance policy, most days you don't need it but you are glad for it when you do.
