Letters: CREA and the Competition Bureau

It appears the Competition Bureau has an axe to grind and they have chosen us as their test case. Their contention that we are restricting competition is neither factually nor conceptually correct. If you type in anything but MLS to inquire about property sale alternatives there are pages and pages of them that come up on the Internet (www.bytheowner.com – www.propertysold.ca – www.propertyguys.com – www.housemaxx.ca – www.canadabyowner.com – www.canada-fsbo.com – www.canadianhomes4sale.com – www.canadahomesforsale.com – and the list goes on).

These alternatives are largely unknown, disorganized and lacking in choice, and most members of the public don’t trust the information available on these unregulated sites. However, anyone who does not want to pay the commission is fully entitled to choose one of these models. In addition the public can place an ad in the newspaper, they can place their own sign on their lawn, they can hire an auctioneer, they can try Craigslist or any other similar option. There is no end of choice for the consumer, so the argument that there are no alternatives and we are restricting competition is absolutely false.

Realtors have spent decades and millions of dollars building a business model that works. The MLS including Realtor.ca is the gold standard for property sales and 90 per cent or more of all property sellers utilize our system. This is a privately owned system that belongs to all of us.

The Competition Bureau claims that we discourage and deny access to our very effective business model from discount brokerages and in fact we may be responsible for their ultimate failure. The Competition Bureau feels our privately owned and highly successful Realtor.ca should become a public utility open to all FSBO organizations and corporate entities as well as members of the public. In their view this will increase competition and reduce what they feel are exorbitant commission rates. Ultimately this will lead to large conglomerates being able to have open access to our information, market themselves and our information to the public, and then sell our own customers back to us or even to buy and sell real estate directly through their corporate websites. At one point in a previous attack on our system the Competition Bureau even suggested that the amount paid to a selling salesperson should be hidden until after the offer has been accepted so the selling agent cannot discriminate against those who do not wish to pay us fair compensation.

There are many discount brokerages on all real estate boards. We do not discriminate against them nor do we prevent the public from seeking their services. Many fail because their business models do not generate enough profits to keep them in business. Agents earn their living through commissions. There is a natural tendency for agents to promote those properties that pay them the most. That being said, buyers still make their own choices. We do not and cannot prevent lower commissions from being part of the marketplace. That is the definition of competition and it exists now.

Through RECO and provincial licensing requirements as well as our local boards we are responsible for the accuracy of the information on the Realtor.ca site. If this is opened to corporations, FSBO organizations and the general public, those safeguards will be gone and the trust the public places in our system will soon follow. The unfortunate consequences of that may be that we simply close the system down and everyone loses.

CREA has tried every reasonable and rational effort to co-operate with the Competition Bureau but they are insistent on prosecuting (do I hear persecuting?) our MLS. As salespeople we have a natural tendency to try to avoid discord and conflict. We cannot allow that to become a weakness and allow the Competition Bureau to turn our privately owned, highly successful business model into a public utility. Sometimes you have to draw a line in the sand and defend your position. That time is now. Ms. Aitken and the Competition Bureau are intent on making us their horrible example and forcing us to turn our private business model into a public utility.

Tom Booth

Broker of Record

Century 21 Results ASAP Realty Ltd

Sarnia, Ont.