On January 3, CREA announced that sellers of properties sold as “exclusive” (also known as “pocket” listings) must add those properties to the multiple listing service within three days or else introduced rules that would face sanctions.Fred Lamb/Globe and Mail
Opponents of the Canadian Real Estate Association's (CREA) new rules restricting the use of privately held, so-called “exclusive” home sales have denounced the measure as anti-competitive.
On January 3, CREA announced that sellers of properties sold as “exclusive” (also known as “pocket” listings) must add those properties to the multiple listing service within three days or face sanctions. introduced the rule of facing Critics charge that the policy is an attack on sellers' right to choose how to sell their homes and an abuse of CREA's dominant position as a provider of MLS data.
“What we're saying is that when competitors and industry groups decide what's in the public interest and make choices for consumers, that raises a red flag.” John Syme he said.
Mr. Syme served as general counsel to the Commissioner of Competition at the Competition Bureau for six years and spent 20 years within federal agencies before starting his own competition law firm in 2019. “If you look at the Competition Act, Section 1.1 says: The goal is to enable competition that allows for more product choice. This is literally what prevents that. .”
Mr. Syme holds an interest in and serves as an advisor to BrokerPocket Inc., a technology startup. BrokerPocket is an online marketplace for off-market listings for everything from new residential contract assignments to commercial real estate and exclusive residential real estate listings. CREA's rules effectively eliminated his listing on BrokerPocket, which was his second largest source of business.
Syme said he had discussed CREA's new rules with his former colleagues at the Competition Bureau and “I know they are considering them,” but at the same time BrokerPocket has not filed a legal complaint. He also stated that he had no intention of filing a lawsuit. Enters a legal battle with CREA. “The Competition Bureau has certain powers. We hope they will enforce something to make the playing field more level.”
CREA policy also restricts the use of “Coming Soon” signs posted at or near residences, and applies a similar three-day requirement for signs to be posted on the MLS after installation. These three-day rules apply to real estate boards in all regions of Canada. State-licensed real estate agents are not required to be members of local real estate boards, but without membership they do not have access to the MLS system, which is essential for buying and selling residential real estate nationwide.
“It was like killing a fly with a sledgehammer,” said Ross Halloran, senior vice president of sales at Sotheby's International Realty Canada and founder of Halloran & Associates. “My first reaction was that CREA is trying to protect itself. … CREA is absolutely not in the MLS with all these new listings coming out from buyer agents and buyers. We were starting to get a lot of complaints about not being able to participate. There were some brokerages in Muskoka that were notorious for that.”
Nevertheless, Mr. Halloran was a believer and promoter of exclusive listings. He uses a Sotheby's platform called ICON to manage his pocket listings that aren't listed on the MLS, especially for clients who own expensive cottages and country retreats in the Muskoka Lakes area. Ta. , a marketplace where sellers and buyers are sometimes celebrities or public figures who value privacy in their financial transactions.
“I deal with a lot of wealthy sellers, so at least 50 percent of the time I've had someone say, 'I don't want a seller that looks bad,'” Halloran said. But he believes it's still possible to sell homes with exclusives. This requires more preparation work and creativity with tools such as listing websites that can only be accessed with a one-time password.
“We do not view this as a curtailment of practice,” said CREA CEO Janice Myers. “We believe that cooperation policies will increase transparency,” she said. “We think it's very pro-consumer and very pro-Realtor.”
Myers said exclusive listings “undermine the confidence of the industry” and that cooperation (in this case, using the MLS in a manner prescribed by CREA) is part of a real estate agent's obligation. “It's a cooperative sales system between members. This obligation to cooperate is a fundamental part of being part of a trade association,” she said.
Syme points out that competition authorities have repeatedly raised questions in the past about the way real estate commissions control the businesses of their members.
“You know, the board of directors is very powerful. They can suspend you or terminate your membership,” Syme said. “Will they wake up again? 'Oh my god, we didn't realize this was anti-competitive!' Will that happen? Based on past deeds, they fought tooth and nail. The case was appealed twice to the Federal Court of Appeals. they are defending their territory. ”
Syme said it would be in the best interest of CREA and real estate agents to voluntarily withdraw the rules governing “exclusive” sales.
“We want to resolve this issue consensually. … We are not going to engage in urban warfare with them,” he said.
