Real estate industry “highly competitive,” according to agents

REALTORS® polled in a recent cross-Canada survey indicated that the country’s real estate market is both highly competitive and provides the necessary safeguards to protect consumers. 

Eighty-six per cent of real estate professionals said they worry that severe deregulation in the real estate industry would erode standards of customer service for Canadians who are buying or selling a home.

According to the online poll of 1,726 REALTORS® by Royal LePage Real Estate Services, the proposed changes to the Multiple Listing Service® will do little to improve an already competitive industry.

“The (Competition) bureau is focused on striking down these (Canadian Real Estate Association rules and regulations governing MLS®),” said Melanie Aiken, the commissioner of the bureau, “so that real estate agents wishing to offer innovative services can do so and consumers can benefit from greater choice.”

CREA disagreed with the decision of the Competition Bureau, saying its rules and regulations are not “anti-competitive.”

WinnipegREALTORS® president Claude Davis said most consumers recognize REALTOR® fees are negotiable.

“What most consumers want to pay for is the assistance of a professional,” said Davis. “Clients have indicated to me that they seek out a professional REALTOR® to come up with competitive pricing on a home, how to prepare a home for sale, holding open houses, and dealing with closing negotiations.

“They are looking for a lot more than simply a posting on the MLS® system,” he added.

At its annual general meeting on March 22, CREA’s membership approved amendments clarifying how its rules operate in order to make it clear that REALTORS® offer a broad range of business models, including flat-fee models.

The Competition Tribunal, a quasi-

judicial body, will review the decision of the Competition Bureau in the coming weeks. CREA is confident the outcome will result in the overturning of the Competition Bureau’s decision. 

In the survey, REALTORS® were asked to comment on the potential impact of “unbundling” real estate services and limiting the extent to which accredited real estate professionals manage the MLS® system, a listings database which holds detailed property information and is used by licensed agents in purchase and sale transactions.

Eighty-six per cent of agents surveyed said they are “concerned that the push to foster increased competition in the industry will result in lower customer service standards.” 

When asked about the state of the current marketplace, 76 per cent of respondents said the industry is “highly competitive.”

“Our agents welcome competition in the industry, but are very concerned that the severe deregulation of the residential real estate brokerage industry would hurt, not help, Canadian home buyers and sellers,” said Phil Soper, president and chief executive of Royal LePage Real Estate Services. 

“To state that there is a lack of competition in the Canadian real estate industry is simply incorrect,” he added. “Every day, the 100,000 men and women in the profession compete vigorously with each other and with unlicensed, unregulated

alternatives. The range of services available from licensed REALTORS® is vast, with fees on the low end that extend downward to a small fraction of one per cent of a home’s sale price."

When asked how often they help clients avoid financial or transactional mistakes, more than 88 per cent of REALTORS® surveyed said “very often” or “often.” 

The poll also found that real estate agents’ primary consideration when advising clients is to optimize and protect clients' financial well-being.

“Entering into a real estate transaction is often the largest financial decision a person or family will make, and government regulators and we in the profession have a responsibility to Canadians to ensure that the marketplace has proper safeguards in place,” Soper said. 

“The critical elements in maintaining a fair and efficient real estate market include the need to ensure REALTORS® meet ethical and educational standards, to protect our clients’ sensitive personal data, and to ensure the integrity of listings information.”

While almost all advisors surveyed use the MLS® system (98 per cent), they commonly use other tools to promote listings, including an open house (90 per cent), newspaper advertising (89 per cent), and their website (87 per cent).

“We surveyed our agents’ opinions on these important issues because we feel it's critical for those in the profession —real estate professionals from across Canada working with home buyers and sellers every day — to have a voice in this matter,” added Soper.