A year and a half ago, the media’s sensationalism almost brought the Real Estate market in Canada to a halt. Gloomy headlines had consumers nervous about their largest investments. Sellers were panicking, and buyers were in a holding pattern. After a while, consumers realized that the media’s take on the Real Estate landscape was not entirely correct, and the Real Estate market returned to full strength, bringing the Canadian Economy back to stability. This week, creative journalism has surfaced once again and surely blown the CREA vs. Competition Bureau challenge way out of proportion over the past few days. Headlines on television, and in newspapers have made it seem as though the Competition Bureau has already won a war they are fighting with themselves. We are dealing with journalists that do not understand either side’s argument writing articles that are seemingly bashing Realtors everywhere. Part of a Realtor’s Professional responsibility is to protect the consumer by maintaining the integrity of the CREA owned MLS system. Changes proposed by the Bureau that would undermine the MLS system are not in the best interest of the Canadian consumer. Realtors are governed by federal, municipal and provincial bodies and adhere to strict rules and a Code of Ethics to maintain the integrity of the data that is put on the MLS. As Realtors, we would not be acting in the best interest of the consumer if we allow the Bureau to have its way with our marketing system. The battle is not about commissions or our longevity. The battle is about principle. The MLS is owned by CREA, was developed by CREA, is maintained by CREA, and CREA members pay fees for the upkeep and improvement of the system annually. CREA members are licensed to use the system as a tool to assist their clients market their properties and realize favourable returns on their largest investments. How does a third party force an organization to give up its trade secret/tools to non-members? This is my issue, and also the fact that the media’s misinterpretation of the issue could cause a significant jolt to the Real Estate landscape in Canada. What we lack is not competition, what we lack is journalistic integrity.
Real Estate is Canada’s economic engine. It is the driving force that prevented us from a devastating recession last year. A strong housing market alongside the world’s #1 ranked banking system continues to lead us towards economic growth.
With this in mind, it is mind boggling as to why the Competition Bureau would fail to acknowledge the concessions CREA has made to come to a resolution on this front. This week, CREA has made changes to the MLS to satisfy the Competition Bureau and is willing to work with the Bureau to resolve issues raised. In turn, the Bureau has walked away from the table electing in their sole discretion to take this matter before a Tribunal.
Change is a constant in any business. Just over 50 years ago, the MLS system did not exist. The public site that was created by CREA to allow everyone access to the MLS system is relatively new to Real Estate as well. Everyday, we are surrounded by change. It wasn’t long ago that text messaging did not exist, now millions of text messages are sent around the world every hour. We are not fighting the change, change is inevitable. Realtors embrace change daily. Change is not the issue. The issue here is in regards to Competition. Is the Real Estate Industry Competitive? Has CREA created a monopoly with their MLS System (by the way the MLS is a tool that they own, developed, and maintain through membership fees). The MLS is not the only site available to buy and sell properties. There are hundreds of sites and strategies consumers can choose from to market their property. Many of these sites are operated by non-licensed representatives are not accountable for the data they upload, nor are they responsible for any misrepresentation. To go further, there are currently member brokerages of CREA that offer flat fee arrangements or low cost alternatives with limited or no services. The only stipulation is that they must offer an amount for commission to other representatives, this amount could be $1. The business of real estate is arguably the most competitive industry around. There are approximately 100,000 Realtors in Canada, associated with hundreds or thousands of brokerages in the country. Each Realtor employs their own marketing strategy, fee structure, and competes with one another for business. Fees vary from flat rate to a percentage of the home price. As with anything, you get what you pay for. Buyers and Sellers have, and always will have, the right to market their property or purchase a home on their own. There are many “for sale by owner” businesses that also compete with Realtors. As I’ve stated before, this is not about competition at all. How can it be? There is no monopoly, there is no fixed fee structure, there is no set services to purchase. In my opinion, there is no issue!
Now, if it is decided that the MLS be opened up to everyone, this is not a huge deal, but it will come with consequences. In today’s day and age of Identity Theft, Fraud and Misrepresentation, consumers will be left to fend for themselves - if they choose to act on their own behalf. There will be lawsuits, people will lose their homes, and there will be more work for the banks to prevent mortgage frauds. This is good news for Realtors though. Allowing the posting of properties by parties that are not obligated to be responsible for the information they upload will enhance the value of a Realtor. Consumers will rely on a Realtor’s expertise even more so to protect their best interest. Michael Polzler, Executive Vice President and Regional Director of Re/Max Ontario-Atlantic, states “there is more to what we do as realtors than place properties for sale on the MLS…….MLS is just one of the tools that we use during the course of a transaction”. When buying and selling their largest investment, consumers will continue to rely on the expertise, education, experience and negotiation abilities of professional Realtors. The media has created a perceptions that organized real estate starts and ends with the MLS system. How unlike the media to stray from the truth, isn’t it? Unfortunately, the truth will not sell newspapers. Let’s look at what an experienced agent will NET for the consumer as opposed to discount brokerages or sales by owners. The figures speak for themselves. You get what you pay for. When selling a home, what is important is the amount the Seller puts in their pocket at the end of the day. A proven Realtor’s expertise and knowledge will continue to be relied upon and we will continue to deliver and ensure the best return on investment for our clients. Although I haven’t been known to agree with the media over the past two years, I must agree with them on this next point. The media is correct in that the value a Realtor brings to Real Estate transactions is about to change. A Realtor’s value is about to be INCREASED tremendously! J
Asif Khan, Realtor
Re/Max All-Stars Realty Inc.
Google me: Asif Khan Re/Max