“We are going to see even more of these websites springing up, all kinds of alternatives [sic] models…A lot of them will fall by the wayside. It almost doesn’t matter what happens at the [tribunal] hearing. I think the writing is on the wall.” Financial Post
Lawyers throw their hat in the ring: CREA vs. Competition Bureau
May 17, 2010
Anytime a monopolistic industry appears to be opening up, companies jump in to be the first to take advantage of the shiny new competitive industry. Look at the recently opened Canadian cell phone industry. Both WIND and Public are duking it out on the battleground where most companies are too afraid to go: price wars.
Anyway, the Canadian Real Estate Association (CREA) has been under some rapid fire lately. And the target is to open up the Multiple Listing Service (MLS) that they currently own. Many home sellers want to have their property listed on the MLS, but don’t want to pay for the full service of an agent.
So now lawyers are stepping up to the plate. And, this time, they’re not remaining consistent with the overused joke of “overpaid lawyers”. Nope, they’re actually charging less than traditional agents. On www.propertyshop.ca, a seller can pay 1% to 1.5% to list their property on the MLS. That’s quite a spread between! The average commission fee charged by agents is 5%. But there’s also definitely a spread between the services rendered under the different fees.
You get a lawyer’s advice for the duration of the selling process. But you won’t have a realtor coming to your home to show the property or list it in any resale magazines. That’s the seller’s job! And that’s really what this whole dispute is over: allowing home sellers to purchase only the services they need.
If you’ve been following the story of CREA vs. the Competition Bureau then you might be thinking: “Hey, has CREA even gone to the tribunal hearing yet?”. While the answer is “No”, it seems that increased openness in the industry is inevitable.
John Andrew, director of the executive seminars on corporate and investment real estate at Queen’s University, said:
So watch out, realtors. Looks like other people are willing to do part of your job for a lower fee. Either sellers will realize they needed realtors to handle the marketing or agents have been cashing in on monopolistic rules for a while now. We’ll see!