Cheaper home prices possible now that MLS can list privately sold properties
Toronto homebuyers had a rare reason to pay attention to news from Newfoundland this weekend. The Canadian Real Estate Association (CREA) met in St. John’s to ratify a deal between the realtors and the federal competition bureau that will allow private-sale properties onto the Multiple Listings Service (MLS)—a database that accounts for most of Canada’s house sales. In exchange for giving the competition bureau what it wants, the CREA avoids a court case it was probably going to lose and, more importantly, opens the door to cheaper houses.
CBC gave this example:
“A lot of Canadians didn’t know they could sell without a real estate agent if you could believe that,” said Walter Melanson, director of partnerships with PropertyGuys.com, a no-frills company that helps individuals sell their own houses.
Companies like PropertyGuys.com earn their income through flat advertising sales. Until now, however, their clients have been unable to list with MLS, which is a primary source of information for prospective buyers.
This is a good thing for people selling their homes, and presumably for buyers if the lower prices trickle down at all. It’s not particularly unexpected; when the deal was announced at the beginning of the month, it seemed like a sure thing that CREA would ratify it. Of course, with growing concerns about a softer real estate market, there may be a lot more home sellers soon, meaning this change came just in time to save MLS users a tidy sum.
• MLS monopoly’s end welcomed [CBC News]
• Real estate association ratifies agreement [Toronto Sun]
• MLS ruling a ‘win-win’: Realtor [Calgary Herald]
• Landmark deal means cheaper real estate fees for Canadians [Toronto Star]
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Toronto homebuyers had a rare reason to pay attention to news from Newfoundland this weekend. The Canadian Real Estate Association (CREA) met in St. John’s to ratify a deal between the realtors and the federal competition bureau that will allow private-sale properties onto the Multiple Listings Service (MLS)—a database that accounts for most of Canada’s house sales. In exchange for giving the competition bureau what it wants, the CREA avoids a court case it was probably going to lose and, more importantly, opens the door to cheaper houses.
CBC gave this example:
"A lot of Canadians didn't know they could sell without a real estate agent if you could believe that," said Walter Melanson, director of partnerships with PropertyGuys.com, a no-frills company that helps individuals sell their own houses.
Companies like PropertyGuys.com earn their income through flat advertising sales. Until now, however, their clients have been unable to list with MLS, which is a primary source of information for prospective buyers.
This is a good thing for people selling their homes, and presumably for buyers if the lower prices trickle down at all. It’s not particularly unexpected; when the deal was announced at the beginning of the month, it seemed like a sure thing that CREA would ratify it. Of course, with growing concerns about a softer real estate market, there may be a lot more home sellers soon, meaning this change came just in time to save MLS users a tidy sum.
• MLS monopoly's end welcomed [CBC News]
• Real estate association ratifies agreement [Toronto Sun]
• MLS ruling a 'win-win': Realtor [Calgary Herald]
• Landmark deal means cheaper real estate fees for Canadians [Toronto Star]){kind=link}
Get real. Do you think any home owners are going to pass on the savings to the buyer?
Cheaper homes, perhaps, but you get what you pay for. Think about it, currently every Realtor that puts up information on the MLS system is governed by a number of organizations. Who are these sellers governed by? Realtors are held liable for the information that is currently on the MLS system. Say someone puts up the incorrect lot size, or claims that they have 2 legal parking spaces (when in fact only one is legal)who will you go after when you learn the truth? What if the seller skips town, or has put it under somone’s name or a holding company?
What people also fail to understand is that Realtors pay a lot of money in dues, and a complex online resource like MLS costs a lot of money to upkeep. Why should Realtors pay for this if everyone gets to use it?
It is interesting to note that the $200000.00 sale down the street was listed by a salesperson and sold by another, each receiving a commission of $5000.00 each.Good for them.
So the commission was deducted from the sale and the seller received $190000.00 less legal fees etc.
Meanwhile the house next door, identical in all respects should sell for $190000.00 with the new rules in place. I do not think so!!!! No! For sale buy owners have not reduced the value of their home by 5% to compensate for the commission. For sale by owner houses will still want the fair market value for their homes.
Watch out for the liability issues coming forward as a result of this mess created by the competition bureau.
I am sorry for future buyers and sellers who no longer wish to pay for the full comfort of real estate professionals.
How about changing your article title to:
Cheaper home prices NOT NECESSARILY possible now that MLS can list privately sold properties.
There is absolutely no reason to believe that prices will drop. The Sellers will simply seize the opportunity to pocket more money and rightly so in many respects cause after all, he has put in a lot of work and effort.
He has also openned himself up to more liability.
A good Realtor (like me) will still make sure that the information of the property is correct. The only difference with this change is that there would be not representation for the Seller. Seller will still needs to pay something to a Buyer’s Representative though becuase the Buyer’s Agent commission can not be zero.
Also, Sellers that want to be represented will still pay a Realtor to do so.
My prediction is that FSBO’s companies are probably going to disappear.
My. McGrath, perhaps Newfs may one day have cause to pay attention to news from Toronto, but I doubt it.
I was speaking with my lawyer yesterday, the one I refer a lot of my real estate clients to. He thought, after much perusal of the press coverage around the CREA/Competition Bureau story, that this whole “new CREA deal” was going to be the end of real estate as we know it…read on my dear lawyer…
The Competition Commissioner may indeed be the goose who laid the golden egg for licensed REALTORS and note, I said Licensed REALTORS…because now we get to REALLY charge for individual services, collect UP FRONT like all other professionals do, AND be ASSURED of being paid. No more extended freebies to clients!
That is, once the impact of this agreement is sorted out and new Real Estate Board operating rules are in place. We may even need a revision of the provincial real estate legislation which governs the practice of trade in real estate. Ms. Aitken may have opened up a whole can of worms she did not bargain for in her determination to make a name for herself as Chef of the CB.
Now Sellers can continue to charge whatever they like, set elevated list prices or whatever, and why should the listing realtor care? Now his work and expenses will be compensated whatever happens…for example, after a year listing an overpriced property, the seller walks away..to rent, to expire or cancel the listing…with our resources gone totally to waste. We realtors know this well. Sellers don’t care: they’ve exploited us, refused to listen, then walked. There’s a saying in real estate: I want to be your third realtor! What other profession delivers valuable advisory and marketing services, to wait a year to PERHAPS collect the fees due to them and probably not at all. The current system is ridiculous: both listing agent and buyer representation agent should charge fees up front for all services requested…that way we will only have serious clients and no tire-kickers to waste our days/nights and business/family resources.
Mr. Foster (National Post) and other journalists who love to kick us around should follow the golden rule: do not judge others until you have walked a mile in their shoes. It is all a blatant misleading of the public to infer that “lower fees” will somehow equate to what sellers and buyers need to pay for in order to protect themselves from liability and legal problems in the biggest transactions of their lives.Mr. Foster and his fellow journalists obviously have absolutely no knowledge about the intricacies of a real estate transaction and should be challenged to do so before they write their sensationalist nonsense in volumes over the past few months, some of which is actually very slanderous.
So back to my dear lawyer…I said to him: well, now that the buyers and sellers are going to write their own contracts, I guess it falls to you guys (lawyers) to sort out the legal messes which will ensue. He looked pale and said: yes, those clients have no idea how much these messes are going to cost them, and how on earth am I going to collect my legal fees ($1,000’s) to sort them out?
Do I feel sorry for the lawyers after all the non-existent defending they have done for us as a collective group (CREA) throughout this ordeal? They will now know what it means not to bite the hand that feeds them.
And as for the buyers and sellers, well,I am rubbing my hands as I am doing up my price sheet for individual services this very day. Tick the boxes, folks, certified cheque or cash only, please. Payable in advance before we set out to look at a single house, or list your property.
For the clients who really understand the value of a licensed REALTOR, the traditional model will be in place and will continue to be their choice. Intelligent people who understand professionalism will see those “huge” commissions (which only happen in upscale big city markets, by the way…the rest of us really work for a living) as the real deal once they hear about the horror stories from their cheap neighbours.
Oh well they will live and learn. Veritas ad Liberatum
I am surmising that the blog I wrote an hour ago was too close to the truth for your publication. You didn’t have the courage to publish it…this goes to prove that journalists will not take responsibility for the erroneous information they publish, which is directly misleading the public. Shame on you for not exposing the truth.
Jane Douglas
Licensed REALTOR
Province of Ontario
$30,000. plus HST to sell my $600,000. house….for what? To protect my interests? I would rather pay my lawyer $1000.00 to do that. Too many agents driving around in their BMW’s, Mercedes. and Lexus’s at my expense….its about time!!!!!
Santa Claus will have a $100,000 Dollar cheque in your stocking this Christmas! Immediately following Santa’s most generous act, home owners who are selling without a real estate agent will REDUCE the price of their homes to reflect those savings, which they will gladly pass onto home buyers.
I have a lot more fairy tales I will be glad to share with your readers.
Greedy Realtors stop scare mongering you have had your day and its been a long time coming, as for paying up front for buyers assistance DREAM ON, stop complaining, time to for more realistic fees and better service to compete for clients. Alternatively trade in those high end lifestyles and find a vocation more in line with your qualifications. Sure its MLS that initially sells the homes, as for inaccurate listings go ahead check out the site even this l can spot them so thats nothing new.
I’d be happy to pay for value for money services (as per the norm in all other industries) but find it intolerable to pay considerable over ACTUAL COST (including modest markup) & this is where Realtors have no grasp on reality.
Check out such a service:
http://www.flatfeehomelistings.ca/index.php?ref=AMPT
It simply gives home owners more options on how they want to sell their house and what services they feel are important!
I sold my home on my own using Realtysellers Real Estate. Paid only the buyer’s agent commission and saved myself over $10,000. House sold quickly, 33 days on the market and at fair market value. The days of drinking out of the “punch bowl” of home owner’s “equity” is over…..home owners, take charge!
I will immediately grasp your rss as I can’t in finding your e-mail subscription hyperlink or e-newsletter service. Do you have any? Please let me understand in order that I may subscribe. Thanks.