Future of FSBO Business in Canada Jeopardized by Competition Bureau…

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


The successful fee-for-service models offered to the public by many FSBO (for-sale-by-owner) companies are now in jeopardy as a result of what the Competition Bureau is proposing.

Here is a recent excerpt from the Financial Post:

"We are not quite sure what the commissioner is trying to achieve," said Stephen Skelly, vice-president of operations with Ottawa-based National FSBO. "There is a discussion of a fee-for-service operation and that's the kind of thing FSBO businesses already provide."

Mr. Skelly's worry is that if agents list property on the MLS for a one-time fee and provide no additional service, his members won't be able to compete because the MLS has such a dominant position. He is trying to link various FSBO networks across the country and has six signed up, including GrapeVine Home Marketing Consultants in Ottawa, one of the largest in eastern Ontario.

"There is serious concern in the FSBO community that if the commissioner's application is successful, it would be very difficult for FSBO businesses to compete with agents who would have full use of the MLS and ‘related trademarks' and who would have all of the advertising and marketing recourses of CREA and its members. This could ultimately lead to the demise of FSBO businesses and the cost-effective services they provide, and effectively [create] a monopoly situation," the application states.

Full article: MLS rival joins battle against Competition Bureau by Garry Marr, Financial Post  Published: Wednesday, April 07, 2010.

The services National FSBO offers to the public as an alternative to using a REALTOR® is threatened. National FSBO has therefore made an application to the Competition Tribunal suggesting that the bureau would effectively “put them out of business, thus reducing competition”.

This would also have an adverse effect on REALTORS®. There are enough people unsuccessful at trying to sell their homes by themselves that one of the main activities of thousands of REALTORS® across Canada is actively prospecting expired FSBO listings.

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Re-Blogged 1 time:

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  1. Sean Jordan 04/16/2010 11:22 AM
Topic:
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Location:
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Canada, eh
Posts to Localism
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Voice of Reason
Tags:
fsbo
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Rainmaker
449,550
Malcolm Johnston
Century 21 Lanthorn Real Estate LTD., Trenton, Ontario - Trenton, ON
Trenton Real Estate

That's true John. The competition bureau is telling Realtors that we have to provide the same service that "Property Guys" and other FSBO outfits already provide. They will become completely redundant.

I don't know what the Competition Bureau is trying to do. Eliminate our competition?

Apr 16, 2010 08:15 AM #1
Rainmaker
179,718
John Grasty
for real estate results in the Tri-Cities. - Port Moody, BC
Your Tri-cities REALTOR, neighbour and volunteer.

The FSBO niche is a proven business model that provides an alternative service to some consumers.

It appears this whole issue hasn't been thought through very well.

Apr 16, 2010 11:03 AM #2
Rainmaker
96,119
Sean Jordan
One Percent Realty - Coquitlam, BC
One Percent Realty - The Property Finders

I guess finding FSBos and listing them will become a little more harder now.

Apr 16, 2010 11:22 AM #3
Rainer
22,521
Jason Dykstra
As Built Services - London, ON

I never saw this side of the argument, athough it does make sense.  I will admit i do agree with some of the competition bureaus points although their actions our totally un just

Apr 16, 2010 01:02 PM #4
Rainmaker
179,718
John Grasty
for real estate results in the Tri-Cities. - Port Moody, BC
Your Tri-cities REALTOR, neighbour and volunteer.

I'm curious to see if CREA files a motion with the tribunal agreeing to grant intervenor status.

REBGV members are being surveyed on their satisfaction levels for a host of things as we discuss these issues.  I'm hearing overtones in Greater Vancouver for abandoning realtor.ca and even CREA.

Apr 16, 2010 04:53 PM #5
Rainer
437,789
Terry Chenier
Homelife Glenayre Realty - Mission, BC

John,

Strange ally isn't it? FSBO. They seem to be on our side, but it isn't altruistic. New picture?

Apr 16, 2010 05:46 PM #6
Rainmaker
1,561,883
Brian Madigan
RE/MAX West Realty Inc., Brokerage (Toronto) - Toronto, ON
LL.B., Broker

John,

I never gave any thought to this until now. However, the point is well taken. Those alternatives sites would likely go out of business.

Brian

Apr 17, 2010 12:44 AM #7
Rainmaker
478,514
Larry Estabrooks
Independent Real Estate Agent - Moncton, NB
100% representation means NEVER DUAL AGENCY !

Competition. Isn't it great? I see no adverse effect on me. Unless REALTORS® stop supporting REALTOR.ca which would be a needless self-destructive over-reaction to competitive offerings. I'm ready to compete. Bring it on I say.

As for the FSBO companies, they have options like getting licensed. In my opinion that would be good for consumers since currently FSBO companies are unlicensed and unregulated, like "gypsy" cabs.

Apr 17, 2010 01:00 AM #8
Rainmaker
179,718
John Grasty
for real estate results in the Tri-Cities. - Port Moody, BC
Your Tri-cities REALTOR, neighbour and volunteer.

Terry, Brian and Larry: Are any of you being surveyed by your local boards?

Perhaps I'm reading too much into the questions being asked locally but we are being asked about our satisfaction with realtor.ca, our local realtylink.org, services being provided at the various levels, etc. So I'm very interested to see how thiongs unfold.

Apr 17, 2010 03:22 AM #9
Rainmaker
478,514
Larry Estabrooks
Independent Real Estate Agent - Moncton, NB
100% representation means NEVER DUAL AGENCY !

John, other than the annual CREa Member survey, I'm not aware of any survey initiative by my real estate board. That said I believe the Real Estate Board of Greater Vancouver for some time has been at the leading edge of surveying it's members. 

Apr 18, 2010 10:26 AM #10
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Rainmaker
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John Grasty

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