Are We an Apple or an Orange?

If you read some of the news articles about the recent Competition Bureau agreement with the Canadian Real Estate Association, you could truly be confused. But here are some clear facts:

1. You MUST be a licenced Realtor to post a listing on the MLS system. As a Realtor, this seems pretty simple. We all pay a lot of money to join and maintain the system. Nobody is going to say a one-time user can have my services without some strings attached.

2. Listings can be posted by a licenced Realtor without any contract for service. If you read my blog regularly, you know that I think that this is alright. It is somewhere between making your own coffee at home and Starbucks. Some people will desire this level of service. From a selfish point of view, I know that the listing salesperson cannot contract outside of the law, and may be liable, should there be a legal issue in the transaction. This will add stress to our Errors and Omissions policy costs which, in my opinion, is already too high.

3. 85% to 90% of Sellers and Buyers use a Realtor to buy or sell their most valuable asset. There is true value in the services we provide. When this MLS issue hit the press a few years ago in the US, things changed a bit for those buying and selling privately, but those 85/90 numbers did not change.

4. Prudential Grand Valley Realty is a full service brokerage.We're not interested in doing someone a favour by putting their listing on MLS as a favour to "test" the market. You're either an apple or an orange. There's no in between.

MLS and the Competition Bureau

I have been quiet publicly about all the press we have been getting over the past months on the Competition Bureau and the Canadian Real Estate Association coming to a resolve over the user rights on the MLS system. I just received a memo today about the vote that is happening on October 24th to ratify CREA's negotiation with the Competition Bureau. Here's what is going to be different after the ratification: NOTHING!

The press and for sale-by-owner spokespersons have predicted and incorrectly reported that non-realtors will soon be able to list their homes on the MLS system and that the system has been broken. This is completely untrue.
The Competition Bureau has no problem with the Three Pillars of the Canadian MLS System... The Three Pillars had said: only a Realtor could place a listing on MLS; only a listing Realtor can act as an agent for the seller of the property and assist them during the entire time of the listing contract: and a listing Realtor must agree to pay the co-operating Realtor compensation that must be more than zero.

The second pillar is the only issue that has been under discussion and being clarified. The new agreement apparently specifies that CREA and Boards/ Associations cannot prevent or discriminate against “mere postings” or against members who offer mere postings. CREA has always maintained its rules do no such thing. The new agreement recognizes that seller contact information is limited to the member-to-member portion of an MLS® System and recognizes seller contact information will not be published on REALTOR.ca. Essentially the fine print is changed, but the fundamentals remain the same.

What happens from here? The discussion has brought forward awareness to a level of service between a full service realtor and selling privately... a licenced realtor who will "post" your house on MLS but give you no service or advice. The public and the market will decide whether there is a demand for this minimal MLS service.

A good analogy I have heard is about a cup of coffee... You can make it at home in your own coffee maker relatively cheaply. You can go to McDonald's or Tim Hortons and be served for a higher price, or for a higher price yet, you can go to Starbuck's and sit on a leather couch, use their wireless internet, and read their magazines. They all have their advantages and their price.

We're betting the house that most people still want service and good solid advice.

Here's an article in the Globe and Mail from October 15th about this.

Realtors and the Competition Bureau

We're getting lots of press lately. That's probably an understatement. Lots of agents, friends, and business acquaintances have asked for comments. It is going to change our business, for sure. But, perhaps not in the way that some perceive.



Everybody would agree that the media likes to pump a story up and sensationalize it. That is a fact of life. But some of them have reported incorrect information. When the smoke clears (probably in the fall), only licenced realtors will be able to list properties on the MLS system. The issue between our association, the Canadian Real Estate Association and the Competition Bureau is not about private individuals being able list their properties on realtor.ca. The Bureau is perfectly fine with this. Many media people have incorrectly said that this was the issue.



The issue is about agency and the old requirement that the realtor had to have a full agency agreement with the seller for the length of the agreement in order to list the property, and that is no longer a requirement. The tribunal will decide on how this is all going to work out, but CREA already has agreed in principle to this matter.



The new rules will allow licenced realtors to list a property on the MLS system without giving them agency representation. We could also assume that the realtor and seller would be doing this service at a reduced rate, since the seller is getting very little service for the fee.



What this does, is create a new level in the hierarchy of fees and services offered when selling a property. At one end of the scale, you can buy a black and orange sign at Home Hardware and stick it on your lawn. At the other end of the scale, you can hire an educated professional realtor with a many tools, backed by an MLS system data base and cooperating agents (with buyers), for a bigger fee to do all the work for you and get you through the process. In between there are many more choices.

The analogy I heard recently was about coffee. If you have a desire for a cup of coffee, you can brew a cup at home yourself quite cheaply. You have to go to the store to buy the beans, you have to invest in a coffee maker, but it is quite cheap by the cup. Presently, you can go to McDonald's in the morning and get a cup for free. At Tim Horton's you can pay $ 1.40 and even have a chance to win a barbeque or a car. Or you can go to Starbuck's and pay $ 4.00 for a great cup of coffee. The last I checked, all four choices are getting lots of customers and doing well.

Like Starbucks, we have many, many happy clients who will continue to use our services and see real value in what we do for them. But the rest have more choices now.