Latest Allegations Against Canadian Real Estate Association...

By
Real Estate Sales Representative with for real estate results in the Tri-Cities.

April 9, 2010 - 19:41  TORONTO - The federal competition watchdog accused Canada's real estate industry Friday of threatening to ban brokers who attempt to offer a range of services from using its popular Multiple Listing Service.

The Competition Bureau's allegations came in its latest reply as part of its ongoing case against the Canadian Real Estate Association, the group that represents some 98,000 Canadian real estate brokers.

"In cases where small-scale entry by alternative business models has occurred, CREA and its members have disciplined such entrants, exploiting the barriers CREA has erected through its rule-making and rule-enforcing powers," it said.

Unless CREA and its members are restrained by an order from the Competition Tribunal, the bureau says they "will continue to have the incentive, the opportunity and the ability to enact and enforce MLS restrictions that prevent or will likely prevent competition substantially."

Read complete story here: Competition watchdog fires new allegations against real estate association - Sunny Freeman, THE CANADIAN PRESS

The Competition Bureau rejected changes made by CREA last month to clarify its rules, saying the changes don't guarantee more choice for consumers.

The bureau said in its reply Friday that those amendments to the MLS rules extend CREA's control over realtors and the rules are intended to maintain command over real estate services offered in Canada.

You know this is absolute bureaucratic BS, and it really p's me off!

REALTORS® offering alternative or cheaper services to the market is not an issue, and competition continues to flourish.

The rules are intended to maintain control over the accuracy, quality and reliability of the information posted to protect the interest of the general public.

In a wide open arena where there is less rules and controls, the consumer will be at the mercy of every scam artist, as has been happening on existing open sites. These activities are so much of a threat to Canadians that the Competition Bureau posted another reminder on April 6, 2010: Beware of Internet Scammers.

Short-sightedness

And what about the money-laundering and funding of terrorism? I guess they don't care because it's not their jurisdiction.

A short-sighted Competition Bureau fails to see the consequences of what they are proposing. They want the integrity of the system removed regardless of the added risk such stupidity would impose on the public.

That's like saying we don't need a Competition Bureau to protect the public interest; hmm, maybe we don't?

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Ambassador
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Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

I'm not sure I understand the issue in this post.  What I do understand from experience is that "niche" brokers are no threat to regular brokers. 

They, the niche brokers, will always be in our market, but have always been fringe, are fringe now and probably always will be fringe. 

 

Apr 10, 2010 11:23 AM #1
Rainer
437,789
Terry Chenier
Homelife Glenayre Realty - Mission, BC

John,

I've been trying to wrap my head around this issue for some time. What exactly is the CCompetition Bureau's agenda? It's almost getting personal.

Apr 10, 2010 11:34 AM #2
Rainmaker
449,550
Malcolm Johnston
Century 21 Lanthorn Real Estate LTD., Trenton, Ontario - Trenton, ON
Trenton Real Estate

John, I think the competition bureau has just picked this cause because it makes them look like they are doing something and they are trying to get the public rallying behind their cause. We are easy targets. Is there only one competition bureau? Do they have a monopoly on making decisions like this?  

Apr 10, 2010 01:15 PM #3
Rainmaker
179,718
John Grasty
for real estate results in the Tri-Cities. - Port Moody, BC
Your Tri-cities REALTOR, neighbour and volunteer.

Given the sheer volume of transactions on REALTOR.CA (and it’s predecessor), I believe the track record and reputation in protecting the consumer is second to none.  This fact is too often overlooked in the conversation.

Since Melanie Aitken started her assault of CREA and the reputation of REALTORS® through the media, the misinformation has been irreparable.

Our response: "CREA is fully prepared to and would welcome the opportunity to deal with this case before the Competition Tribunal," says Mr. Pahud. "What CREA is not prepared to do, however, is to litigate the case in the media. CREA asks that you refrain from doing so."

 

Apr 10, 2010 02:25 PM #4
Rainmaker
1,561,933
Brian Madigan
RE/MAX West Realty Inc., Brokerage (Toronto) - Toronto, ON
LL.B., Broker

John,

It does seem unprofessional for the Competition Bureau to press their agenda fowrard in the media. That's not the right way to deal with this issue. That's just political and just hype.

Brian

Apr 11, 2010 01:06 PM #5
Rainer
125,191
Not In Real Estate Any Longer
Autaugaville, AL

Hi John,

I've been following this issue for quite some time and it is not about risking the integrity of the MLS system. By allowing a true fee-per-service model this does not in any way shape or form threaten the accuracy, quality and reliability of the information posted on Realtor.ca. Brokerages will still be required to list a seller's home on the MLS system.

CREA's recent changes have done only one thing to address the current issues with the true fee-per-service model and that is to allow sellers to hire a real estate agent to just post their homes for sale on the MLS; however, CREA still states that they will not let buyers contact them directly (their contact information will still only be available to other reps) and their listing must still offer a buyer's agent compensation. These conditions still binds the seller to accept other services from the brokerage and not just be able to hire a brokerage to post the listing - a true "mere posting" - making it necessary for a buyer to still go through an agent for information.

The changes that the competition bureau is asking for will not impede on the full service or any other service model. They just want brokers to be able to offer their services totally "unbundled" if you will. But CREA's recent changes still do not accomplish that.

I work for a full service brokerage. I have had a conversation with my broker on this subject and he has stated quite clearly that he has and will continue to operate as a full service brokerage. That is his choice

What the competition bureau is seeking is choice for brokerages to offer the opposite - a true fee-per-service model - if they want to allowing more freedom for brokerage, reps and clients alike, not less.

I apologize if for my long response, but just want to add one more thing. I've stopped reading news articles on this matter a long time ago because the media just can't seem to get it right.

I go directly to the Competition Tribunal web site for the documents that have been file there: http://www.ct-tc.gc.ca/CasesAffaires/CasesDetails-eng.asp?CaseID=325

It's just more reliable :)

Apr 12, 2010 01:00 AM #6
Rainmaker
179,718
John Grasty
for real estate results in the Tri-Cities. - Port Moody, BC
Your Tri-cities REALTOR, neighbour and volunteer.

Hi Pam, No apology necessary for such great comments. Thanks.

Apr 12, 2010 06:17 AM #7
Anonymous
Larry Hann

Pam - I have been following the issue as well and have read the documentation on the Competition Tribunal Website. Your points are well made, as are some of John's. I feel that both sides are refusing to acknowledge and deal with some very real issues raised by the other party. 

For my part I would like to see CREA address the lack of professionalism in the industry. There are 98,000 Realtors practicing in Canada. Too many of them fail to offer the level of service equal to the compensation they receive. That has damaged our collective reputation. I put a large part of that responsibility in the Broker's lap. Their model is based on numbers, the more agents, the more they get in fees, the better chance they have that an agent will at least bring a few sales to the table based on their SOI. It's short term thinking and it has contributed to our less than stellar reputation with the general public.

I also believe that the industry as a whole has refused to respond to the impact of the internet. For the most part they liked the old model and preferred to carry on business as usual.   

Onto the Competition Bureau. I agree with a previous poster, the way the Bureau (Melanie) has handled this issue feels very much like a personal vendetta. There has been no need to fuel the public's disrespect for the profession, and she has repeatedly. One has to wonder why she is waging such a public battle. Maybe it's strategic - the public support strengthens the Board's case. But John's points  

1. The rules are intended to maintain control over the accuracy, quality and reliability of the information posted to protect the interest of the general public.

2. In a wide open arena where there is less rules and controls, the consumer will be at the mercy of every scam artist, as has been happening on existing open sites. These activities are so much of a threat to Canadians that the Competition Bureau posted another reminder on April 6, 2010: Beware of Internet Scammers.


3. And what about the money-laundering and funding of terrorism? I guess they don't care because it's not their jurisdiction.

As far as I understand if the Competition Bureau gets its way, the public can use a Realtor to post a listing to the MLS for a flat fee. If that is the realtor's only involvement, who does protect the quality of the info provided. Surely the Bureau must recognize the problems this could create. CREA invested huge resources to create the MLS and to make it the effective tool it is today. It's effective because it offers trustworthy infomation. I wonder how long it will take to wreck the quality of such an important resource.

The controls for money laundering were only recently put in place. Will the seller be expected to gather, and will the buyer provide, the type of personal info that Realtors now have to complie and file with their broker. 

I could go on but I need to get back to work.

I think clear heads need to prevail on both sides of this dispute. Unfortunately both parties seem stuck in their own agendas. CREA wants to give up as little as possible and not address valid public concerns, the Bureau seems hell bent to destroy real estate as it is now practiced, with no regard to what actually works for the good of the public. Too damm bad I say.

Apr 14, 2010 11:27 PM #8
Rainer
125,191
Not In Real Estate Any Longer
Autaugaville, AL

Hi Larry,

I agree with you 100% about wanting CREA to address some of the other issues - I personally think there is so much wrong with our industry model that it isn't funny. So much so it would have to be torn down and re-invented. I realize that no matter what there will be bad eggs in the industry, but ours is a system that just makes it too easy to fly in, take advantage of the public, make some good cash and in ten years fly out again - I've actually heard REALTORs profess to this plan. I'm not sure how they can sleep at night.

About protecting the quality of info provided on MLS: Personally, I'm unsure as to why the information on MLS would be compromised by allowing a true fee-per-service model. It is a REALTOR controlling the information - he or she is the one who has been hired to submit it - no different than now. How does just charging a client for this one service going to jeopardize the quality of information found on MLS?

As far as the seller gathering all the info and the buyer providing it the answer would be yes. The seller will have to take on all the responsibilities of selling their home. What do the private sellers do as far as "reporting" goes when handling money? I believe both parties pay extra for their lawyers to take of it.

And the prudent REALTOR will be sure to point that out when speaking with the client about how much work and responsibility is involved with selling a house.

About how they can pay us to do the work or pay lawyers extra for that extra work they'll have to do to close.

About how they are giving up the protection of a REALTOR, because no matter how much you pay a Lawyer they don't do that, and when all is said and done, the seller can do all the work themselves but their bottom line won't be much higher, if at all.  

Now, I've been told that the true fee-per-service model has been working in the US for quite a while now, which I beleive is why Lenn has commented that she doesn't understand the issue. And I have to agree.

Some agents are feeling threatened about giving the discount brokers more options to offer, but the public will use the service they want to use. Some people will want the big box stores to get what they perceive to be a deal and others will go to the store where they can get expert advise and full service.

Apr 15, 2010 01:20 AM #9
Rainmaker
179,718
John Grasty
for real estate results in the Tri-Cities. - Port Moody, BC
Your Tri-cities REALTOR, neighbour and volunteer.

...this guy seems to offer real estate services as "unbundled" as they could possibly get.

Apr 16, 2010 04:55 PM #10
Rainer
125,191
Not In Real Estate Any Longer
Autaugaville, AL

John,

I heard about him. I'd have to say that $109.00 is a little low, but that's the beauty of competition. If someone else wants to come along and do that for $108 they can. If someone doesn't want to do that at all and only offer full service they can.

I watched a show where this real estate company (I wish I could remember where it was, States somewhere I think) does EVERYTHING via the Internet and the agents stay in the office and take calls/answer questions all day.

Technology has caused the industry to change big time and consumers are demanding that the services we offer change too. You can't fight progress, and any good business person will learn how to work with the changes.

Apr 17, 2010 02:03 AM #11
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