MLS deal could lead to lower real estate fees

Posted on 04. Oct, 2010 by in News

Oct 03, 2010 Tony Wong yourhome.ca

Get set for cheaper fees for Canadian real estate transactions.

In a landmark deal, the Canadian Competition Bureau said Thursday that they have reached an agreement with the Canadian Real Estate Association that will allow real estate agents to provide “innovative service and pricing options to customers.”

“This is a great result and welcome news for Canadians,” said Melanie Aitken, Commisioner of Competition in an interview. “If ratified, this means that consumers can choose and pay for the services they want.”

The deal means that agents will be able to offer a basket of flat fee services such as posting listings on the Multiple Listing Service without “anti-competitive” rules that discriminate against them, said the agency.

The bureau feels that real estate fees in Canada are too high because of anti-competitive rules designed to protect access to the MLS, which is the source of most transactions.

The deal still has to be ratified by CREA membership at their annual general meeting later this month.

The agreement means that a case to be heard at the Competition Tribunal to take place next April will be off the table if members vote to the changes.

The bureau launched the court challenge after three years of discussion with organized real estate that led to an acrimonious break down in talks.

“CREA has always been committed to ongoing dialogue with the Competition Bureau. This agreement is the result of extensive negotiations,” said CREA President Georges Pahad. “Both sides gained a better understanding of their respective concerns through our discussions.”

Pahud said the agreement avoided unnecessary and expensive litigation proceedings.

CREA will hold a general meeting in St. John’s on Oct. 24 to vote on the agreement.

Lawrence Dale, a Toronto lawyer who claims that he had to shut down his discount realty service because of rules enacted by CREA , said consumers are the real victors.

“CREA absolutely rolled over and buckled. They knew they were wrong,” said Dale. “What this means is that they can’t use the threat of denying access to the MLS as a way to dictate trading activity”

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