Com­pe­ti­tion watch­dog chal­lenges real es­tate as­so­ci­a­tion’s rules

Cape Breton Post - - CAPE BRETON -

TORONTO (CP) — Home­buy­ers and sell­ers could see a sig­nif­i­cant de­crease in trans­ac­tion fees if Canada’s Com­pe­ti­tion Bureau wins a chal­lenge to the Cana­dian Real Es­tate As­so­ci­a­tion’s al­lor-noth­ing pric­ing struc­ture, ac­cord­ing to a bureau spokesman.

The Com­pe­ti­tion Bureau has been dis­cussing the mat­ter with the as­so­ci­a­tion since 2007 af­ter re­ceiv­ing sev­eral com­plaints, but the CREA has not been will­ing to make changes to its prac­tices, said the spokesman, who asked not to be iden­ti­fied by name.

On Mon­day, the bureau filed an ap­pli­ca­tion with the Com­pe­ti­tion Tri­bunal seek­ing to strike down the CREA’s spe­cific rules on the use of its Mul­ti­ple List­ing Ser­vice.

Among other things, the bureau al­leges that the CREA’s rules limit choices for con­sumers and force them to pay for ser­vices they don’t want, while also sti­fling in­no­va­tion in the mar­ket for res­i­den­tial real es­tate ser­vices.

For ex­am­ple, agents are for­bid­den from of­fer­ing con­sumers the op­tion of sim­ply pay­ing a fee to list a home on MLS, it says.

Un­der cur­rent rules, real es­tate agents must han­dle all de­tails of the trans­ac­tion, al­though there are some ser­vices that con­sumers might wish to do on their own, such as book­ing in­ter­views to view the prop­erty or mak­ing an of­fer.

The CREA, which rep­re­sents more than 98,000 real es­tate bro­kers, agents and sales­peo­ple, al­lows only its mem­bers to post homes for sale on its MLS data­base, where the vast ma­jor­ity of Cana­dian home sales take place.

Its rules force agents to of­fer a stan­dard pack­age of ser­vices, pre­de­ter­mined by the CREA, with no room for flex­i­bil­ity for ei­ther con­sumers or agents, ac­cord­ing to the bureau spokesman. Agents must agree to of­fer all ser­vices whether con­sumers want or need them.

Al­though the spokesman would not com­ment on the CREA’s fee sched­ule, he said if the bureau is suc­cess­ful it would drive down real es­tate trans­ac­tion fees.

He added that in the United States, where many such re­stric­tive rules have been lifted, fee prices had dropped sig­nif­i­cantly and now range from US$99 to $500, much lower than in Canada.

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