Real Estate Association's Rules Challenged

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 all-or-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.
(The Canadian Press)