Despite what you may have read or heard, consumers do not now have unlimited access to Canada’s Multiple Listing Service (MLS) system. You can’t list your home on MLS without a using a Realtor. And the public website operated by the Canadian Real Estate Association (CREA), is not the same as the MLS system that Realtors use.

There have been a lot of misconceptions about the MLS system and how it works, as the news media struggled to figure out the implications of a recent dispute between CREA and the Competition Bureau, a federal government agency. After the bureau filed a complaint stating that CREA’s MLS rules were too restrictive, the two organizations came to an agreement that now allows real estate brokerages to post “mere listings” on the MLS.

A “mere listing” is just that – a Realtor can place your house on the MLS system but there is no requirement for him to do anything else to help in the sale of your home. This means homes that are for sale by owner (FSBO) can be listed on the MLS by a Realtor for a flat fee (as little as one cent) and everything else is the owner’s responsibility, from setting a price to preparing the home, showing it to prospective purchasers and negotiating a deal.

CREA has said all along that there were no minimum service rules in place previously, but the Competition Bureau disagreed. The new Consent Agreement says that CREA members “should not deny or discriminate against Realtors wishing to offer mere posting services.”

Why would a real estate brokerage offer to list your house for sale for very little money? They are hoping that, like most sellers, you’ll want more from them. FSBOs represent a very small percentage of the marketplace.

Several real estate companies have sprung up to offer flat-fee and a la carte real estate services – essentially a menu of services from which the seller can choose. The more services they pick, the more they pay. For example, in Edmonton has a flat fee of $999 that includes a free market evaluation and assessment of the home’s value, signage and feature sheets. It also provides customers with a licensed “selling coach” while the home is on the market, the company says. The FSBO handles everything else themselves. broker Rod Thompson says he is “concerned there will be agents just providing access (to the MLS) with no service, which is not our intent at all.” He says the firm “is a full-service brokerage and committed to educating sellers and providing them with ongoing assistance at no additional cost throughout the selling process.”

When the changes were announced, at first the news media proclaimed that it represented a huge change to the way real estate would be bought and sold. Some said consumers would be able to save the all commission fees paid to real estate professionals.

However, soon the headlines softened, with some noting that not much has really changed.

Consumers have always had the option of selling their homes without the use of a Realtor. Now they can place the home on MLS, if they can find a local agent to list it for little money. However, the MLS system is designed to share information with other Realtors who can bring potential buyers to the home – and if the seller isn’t interested in paying the Realtor to bring buyers, there’s no incentive to show that home.

Placing a house on the MLS system means they can also get a listing on, the public website owned and operated by CREA. For buyers, the website is great tool for exploring the real estate market, finding out what’s for sale in particular a neighbourhood. But is not the MLS system – it’s just an advertising site. The MLS system, which is available only to Realtors, contains much more information about each property than any public website, including private mortgage information, how long the house has been on the market, historic sale prices and more. The seller also has an option to block things from if they wish. Perhaps most importantly, is not as up-to-date as the MLS system. One Realtor compares it to sitting down on Tuesday to look at the real estate listings in Saturday’s paper. A property may be sold long before it’s taken off, where the information does not get updated.

Several major real estate companies have announced that they don’t intend to change their business models, because they have found that most people are willing to pay for professional real estate services that they can trust. Paying for services a la carte may have some benefits if you believe you can make a quick sale, but if the house doesn’t sell and you end up buying more and more services, it could end up costing more in the long run.

Nonetheless, competition is a good thing and the biggest result of the MLS changes and the publicity is that to be successful, agents and brokers will have to offer greater value and quality to their clients.

Written by Jim Adair
For Realty Times, Dec 2010
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