CREA rules governing MLS® not anti-competitive, says president

Across Canada, the media is reporting on the Competition Bureau’s case against the Canadian Real Estate Association to “smash” what it terms are anti-competitive home listings on MLS®, which allegedly limits consumer choice and  artificially inflates the price of real estate transactions.

The Competition Bureau concluded that REALTORS® should not have exclusive guardianship of MLS® data about local real estate markets, according to media reports. Media commentators have referred to the bureau’s ruling as the “democratization” of the real estate market.

But the reality is that CREA’s rules governing the Multiple Listing System® are “not anti-competitive,” said CREA president Dale Ripplinger.

He said CREA is confident the Competition Tribunal will rule against the Competition Bureau. The tribunal is a quasi-judicial body which will make the ultimate ruling.

“The bureau is focused on striking down these anti-competitive rules so that real estate agents wishing to offer innovative services can do so and consumers can benefit from greater choice,” said Melanie Aitken, the commissioner of the bureau.

Ripplinger disagrees with Aitken’s assessment of the role of the existing MLS® systems, saying consumers do have choices available to them.

“CREA currently has more than 98,000 members (including 1,400 locally, who are members of WinnipegREALTORS®) operating independently across the country, competing on a daily basis for the business of Canadian consumers.

“There are more consumer choices and more business models today than ever before — and that is a good thing.”

Ripplinger said Canadian consumers can negotiate the level of service they want and the fees or commissions they want to pay for that service.

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’re looking for a lot more than simply a posting on the MLS® system,” Davis added.

“What hasn’t changed — and cannot change to ensure the integrity of MLS® systems which operate across the country — is the need for accurate and reliable information to be provided for use in MLS® systems,” said Ripplinger, “and a commitment by REALTORS® using MLS® systems to comply with a code of ethics and regulatory requirements across the country.”

He said these basic requirements are necessary for the continued reliability of MLS® systems, “which Canadians have come to trust for years and years.”

When a home seller or buyer lists a home on a real estate board’s MLS® system, it assures them the information is accurate, reliable and professionally managed, providing accountability for the information that is listed, added Ripplinger.

“This system not only provides consumers with choice, but also confidence, as they engage in one of the biggest and most important financial transactions of their lives.”

Ripplinger explained that the MLS® system is a co-operative marketing network established decades ago by REALTORS® to help the public sell and buy real estate.

“MLS® systems are member-to-member services, paid for by the REALTOR® members of a local board or association,” he added. “It is the local board or association that actually administers and operates each MLS® system across Canada.”

WinnipegREALTORS® administers and operates the local MLS® system under a licence from CREA which owns the MLS® and REALTOR® trademarks.

CREA also runs the website, which is an advertising vehicle for MLS® listings, and is in competition with other websites on which properties are advertised by home sellers and REALTORS®, commented Ripplinger.

In Winnipeg, MLS® listings are found in each weekly issue of the Winnipeg Real Estate News — published by WinnipegREALTORS® — and on its website, which is updated daily, minute-by-minute.

“There have been numerous reports over the last several days that as a result of the (Competition) Bureau’s actions commission rates will come down,” said Ripplinger. “The fact is that CREA’s rules have nothing to do with commission rates. CREA does not dictate or determine commission rates — or tell its members what business model to choose or how to run their businesses. 

“The mythical ‘fixed commission rate’ does not exist,” he added. “Any transaction between a REALTOR® and a home seller or buyer is subject to negotiation. 

“In CREA’s view, consumer choice is a good thing and the market should decide.”