CREA members approve consent agreement negotiated with Competition Bureau

This morning, representatives from nearly 100 member real estate boards across Canada voted to ratify a consent agreement negotiated with Canada’s Competition Commissioner at a general assembly meeting of the Canadian Real Estate Association(CREA) in St. John’s, NL.

Previously approved by CREA’s board of directors, subject to ratification of the national real estate association’s member real estate boards, the consent agreement makes it crystal clear that CREA and its member boards have no business dictating service levels for MLS® listings. Brokerages may opt to offer service levels that range from a “mere posting” where the brokerage’s responsibility would be limited to data verification and entry in the MLS® system, to a full slate of additional services which include showing the property, marketing and negotiation of purchase contracts.

CREA has always maintained that their MLS® rules do not prohibit brokers from negotiating limited service agreements with property sellers. One MLS® rule that did exist when the investigation began prohibited “mere postings.” The association has always maintained that the intention of this rule was only to keep members responsible for the accuracy of MLS® data in order to maintain the integrity of the MLS®, and that all other services were negotiable. In their initial response to the Bureau’s allegationthat CREA’s rules were developed to prevent limited service models, CREA cited several examples of brokerages that were offering limited services, including MLS® listings for under $200.

Precise details of the agreement have been kept under wraps on the understanding that litigation before a Competition Tribunal scheduled for April of 2011would proceed if the CREA membership voted against the ratification of the agreement. A full copy of the agreement which is immediately effective, and in effect for ten years, will be available on the Competition Bureau website as soon as it is registered with the Tribunal.

Memorandums released by CREA and member boards after the agreement was struck have not provided a great detail of detail, except for a few points of clarification in answer to erroneous news reports. In those memos, CREA has made the following points:

  • The agreement would not allow public access to MLS® systems. Sellers wishing to utilize the MLS® would still need to access it through a REALTOR®.
  • The agreement would not require brokerages to adopt limited service models.
  • That an offer of compensation to buyer’s agents would be required for inclusion of a property on an MLS® system.
  • That real estate brokerages would continue to be responsible for the accuracy of the data entered into an MLS® system.

In a memo to the membership of the Saskatoon Region Association of REALTORS® emailed shortly after the vote, executive officer Harry Janzen had this to say about the impact of this agreement on the Saskatoon real estate industry and consumers who utilize services offered by members.

The Saskatoon Region Association of REALTORS® has always been a progressive association in its delivery of services to its members and in turn, the consumer. In the mid 1980s Saskatoon saw the first of what was then viewed as an alternative business model.

Since that time, several brokers have chosen to offer services that assist sellers who prefer less than full service in the marketing of their property. The REALTOR® community in Saskatoon and area will continue to offer marketing services that philosophically align with their belief on how to best serve today’s consumer.

Consumers need to be aware that regardless of the service level they choose to receive from a REALTOR®, the REALTOR® must still comply with provincial law and the industry’s regulatory body the Saskatchewan Real Estate Commission. Two examples of Saskatchewan requirements are: An agency relationship must exist between the REALTOR® and the Seller based on the services chosen. Another example is REALTORS® are still responsible to verify the accuracy of MLS® data to ensure association MLS® system data integrity.

Given Saskatoon’s experience and history with alternative business models, approval of the consent agreement simply means business as usual for both REALTORS® and consumers.

Only time will tell the true impact of this agreement, but one thing is for sure; this REALTOR® is happy to see the end of this ugly battle, regardless of where it goes. I believe in free markets and competition. Availability of the broadest possible range of services is good for consumers and for real estate practitioners alike.

CREA President Georges Pahud comments on the agreement here. Final agreement paves way for more competition in Canada's real estate market: Competition Bureau Read also: Canada’s Competition Bureau concludes CREA’s rules are anti-competitive Read also: MLS rules and CREA headed for Competition Tribunal

Update: A copy of the consent agreement between CREA and the Bureau is here.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

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Norm Fisher
Royal LePage Vidorra

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