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MLS changes maintain 'blank cheque' for realtors, competition commissioner says


Blog by The Schacter Team | March 24th, 2010


 
 

The Canadian Real Estate Association is "improperly leveraging" the Multiple Listing Service (MLS) system that it owns by imposing anti-competitive rules that stifle competition, says Canada's competition commissioner.

Amendments CREA made Monday to the rules of the MLS system could potentially be even more anti-competitive, said Melanie Aitken on Tuesday at a Calgary Chamber of Commerce luncheon.

"What they preserved was an absolutely open-ended blank-cheque opportunity to pass any rules that they wanted, including highly anti-competitive rules, and so give it with one hand, take it away with the other," she said.

The issue is being taken to Canada's Competition Tribunal.

The Multiple Listing Service system in Canada is owned by CREA and is responsible for about 90 per cent of all residential property sales.

CREA voted Monday on amendments it said clarifies some of the existing rules with the system. The amendments would allow a seller to pay a flat fee to a realtor to list their home on the MLS system and have prospective buyers contact the seller by phone.

Aitken said the rules that are in place deny agents on the one hand from offering innovative service and pricing models to Canadian sellers -- "a la carte if you will, slice and dice, buy what you want" -- and consumers on the other hand from being able to choose to only pay for the services that they want.

Becky Walters, vice-president of the Calgary Real Estate Board, said realtors feel they have completed everything that Aitken has asked for in this issue. "There always has been flexibility within the industry," she said. "It's something that we've always done [and] in the verbiage that we've changed, it allows it to be more clear to the public and to everybody that flexibility has always been there," said Walters, who took in Aitken's presentation at the chamber.

Walters said a flat fee to list a home on MLS is up to each individual realtor and their clients. But Aitken said there is no guarantee the amendments voted on by CREA are permanent.

"They are subject to rules being passed by CREA or its board willy-nilly, tomorrow, this afternoon, next week," she said.

CREA has until Friday to file a document on its position to the tribunal. Aitken is hoping the tribunal will look at the issue by the fall.

The current controversy swirls at a time when the Canadian real estate market is humming along. In a report released Tuesday, Adrienne Warren, senior economist with Scotiabank, forecast the volume of MLS sales in Canada to hit about 510,000 this year, up 10 per cent from 2009 but still a touch shy of the 2007 record at the national level. Average prices are forecast to increase about eight per cent to a record $345,000 in Canada.