MLS changes benefit all publics

The Canadian Real Estate Association has wisely avoided adding chaos to uncertainty as the real estate market hits the doldrums. Faced with either opening up its Multiple Listing Service or having a long and messy fight with the federal Competition Bureau, CREA chose the safe route.

The main concern of the Competition Bureau was that the MLS was too restrictive, and now the public will have more access to the service. Though the system will continue to be restricted to use by licenced realtors, the public will be able to hire a realtor to simply post a private sale.

This is a good settlement and seems to be satisfactory to Melanie Aitken, the Commissioner of Competition. And it ought to be satisfactory to realtors all over Canada. Realtors work hard and serve Canadians well in executing what is one of the most important financial transactions a person can do.

While it is a no-brainer for most of us to use a realtor, there are some who for various reasons don't want to. Often it's about money, wanting to save on fees. Others are confident they can do the same work as well and don't believe they need a realtor.

See full article on

October 25, 2010 in Agency Matters | Permalink | Comments (11) | TrackBack

CREA's Proposed Rule Changes

Changes to the Canadian Real Estate Association’s Pillars and Interpretations (due to the Competition Bureau’s investigation) are being brought forward to the annual general meeting of the Association on March 22, 2010. Here is an overview of what changes they are proposing:

The current Three Pillars of the MLS System are as follows:

1.MEMBERSHIP: Only REALTORS® may place a listing on a Board/Association’s MLS® System.

2.AGENCY: A listing REALTOR® must act as agent for the seller to sell the property and to assist the seller throughout the entire time of the listing contract.

3.COMPENSATION TO CO-OPERATING BROKER: The listing REALTOR® agrees to pay to the co-operating (i.e. selling) REALTOR® compensation for the co-operative selling of the property. An offer of compensation of zero is not acceptable.

The Competition Bureau is focused on is the AGENCY Pillar. CREA is proposing that the new verbiage for this Pillar shall read as follows:

AGENCY: A listing REALTOR® must act as agent for the seller in order to post, amend or remove a property listing in a Board’s MLS® System. The nature of any additional services to be provided by the listing REALTOR® is determined by agreement between the listing REALTOR® and the seller, subject to applicable regulatory requirements and the Rules of CREA and Boards/Associations.

What does this mean? A seller must work with an agent in order to have their home placed on the MLS® System. It also means that the agent can provide only that service to the seller if that’s what is decided between the agent and the seller (as long as the agent is still complying with their Board’s/Association’s/CREA’s rules and regulations; i.e.; if the agent’s Board requires that the agent must submit the “SOLD” price, the agent still has to comply with that rule).

CREA also has 7 Interpretations, they are as follows:

1.The listing REALTOR® shall receive and present all offers and counteroffers to the seller.

2.The listing REALTOR® shall provide professional advice and counsel to the seller on all offers and counteroffers unless otherwise directed by the seller in writing.

3.The mere posting of property information in an MLS® system is contrary to CREA’s Rules. A “mere posting” occurs when the listing agreement relieves the listing member of any obligations under the Rules, including the obligation that the listing REALTOR® remain the agent of the seller throughout the term of the listing contract.

4.The listing REALTOR® is responsible and accountable for the accuracy of information submitted to a Board/Association for inclusion in the Board’s MLS® system, and the Board/Association is responsible for ensuring that the data submitted to it meets reasonable standards of quality. 5.Only REALTORS® are permitted to display the MLS® trademarks in signage, advertising, etc.

6.Only the listing REALTOR® name(s) and contact information may appear on The seller’s name or contact information shall not appear on or in the public remarks section of the MLS® system.

7.In cases where a Board permits listings in which the seller has reserved the right to sell the property himself/herself, that fact shall be specified in the Board’s MLS® database.

CREA is proposing the following changes (it will actually remove 2 completely, creating only 5 Interpretations):

INTERPRETATION 1: Remove completely.

What does this mean? In relation to INTERPRETATION 2, it means that if a seller wants to negotiate and/or work with the buyer directly, they can. But, they must put this in writing to the agent so that the agent is aware of the expectations.

INTERPRETATION 3: Remove completely.

What does this mean? It means that an agent can be used to only post the listing on the MLS® System and not remain the agent throughout the entire listing process. Again, it must be in writing from the seller to align with INTERPRETATION 2, and of course, the agent is not released from any Board/Association responsibilities as mentioned previously.

INTERPRETATION 6 (new verbiage): Where the seller directs the listing REALTOR® in writing to do so, the seller’s contact information may appear in the REALTOR® only remarks (non-public) section of a listing on a Board/Association’s MLS® System. The seller’s contact information shall not appear on or in the general (public) remarks section of a listing on a Board/Association’s MLS® System. The listing REALTOR® may include a direction in the General Description section on or on websites operated by CREA or a Board/Association to visit the REALTOR® website to obtain additional information about the listing (but the nature of such additional information shall not be specified).

What does this mean? If a seller would like REALTORS® or the public to contact them directly, then they must direct the agent to do so. But, their contact information will not be posted on the public MLS® System. It can be available to agents on the Board (internal) MLS® System under the “REALTOR® only remarks” (non-public) or placed on the agent’s or the agent’s broker website with directions on the public side (, under “General Remarks” to state that that there is more information on the REALTOR® website (not allowed to be specific around what other information is available though).

INTERPRETATION 7 (new verbiage): Where the seller has reserved the right to sell the property himself/herself, that fact shall be specified in the Board/Association’s MLS® System.

What does this mean? If a seller is selling their own home and only using a REALTOR® to gain access to the MLS® System, that will be disclosed on the Board/Association’s MLS® System.

On March 22, 2010 we will find out whether or not these changes will be adopted by CREA.

March 19, 2010 in Agency Matters | Permalink | Comments (7) | TrackBack

Brookfield buys GMAC real estate unit

Toronto based Brookfield Asset Management is purchasing GMAC's its home services unit which includes real its estate brokerage. The transaction, which will stretch Brookfield’s Residential Property Services unit into the United States, will most likely be completed in the fourth quarter this year, Brookfield said. Terms were not disclosed.

GMAC is trimming mortgage operations after seven consecutive losing quarters at its Residential Capital business. This month, the company dismissed 5,000 Residential Capital employees, or 60 percent of the unit’s staff, and closed all 200 GMAC Mortgage retail offices because of weak real estate markets.

Moody’s Investors Service downgraded Residential Capital’s debt on Sept. 10, citing mounting losses, cash strains and “an impaired franchise.”

These are “pretty tumultuous times for the real estate industry,” said Graham Badun, managing partner and chief executive of Brookfield Residential Property Services, formed in the GMAC deal. “We do believe in the long-term positioning of residential real estate.”

GMAC, co-owned by General Motors and Cerberus Capital Management, renewed a credit facility with Citigroup last week, giving the lender access to $13.8 billion, down from $21.4 billion a year earlier. The company, which is based in Detroit, has amassed $5.4 billion in losses in the last year as the mortgage market crumbled and home foreclosures rose to a record.

Brookfield, based in Toronto, manages more than $95 billion in assets including the Royal LePage real estate brokerage brand and franchise.

September 24, 2008 in Agency Matters | Permalink | Comments (1) | TrackBack

The National Do-Not-Call List

"Do Not Call" Registry effective September 30, 2008

The Canadian Radio-Television and Telecommunications Commission (CRTC) is responsible for the National Do-Not-Call List (DNCL), which contains the names and telephone numbers of the consumers who do not want to receive unsolicited telephone calls from telemarketers.

Telemarketing is the use of telephony technology (telephone, cellphone, fax, etc.) to make unsolicited telephone calls or send unsolicited messages to consumers for the purpose of solicitation. Solicitation is selling or promoting a product or service, or soliciting money.

The object of the National DNCL is to provide a way for consumers to prevent telemarketers from calling them without consumers having to deal with individual telemarketers and their do-not-call lists. Telemarketers will not be permitted to call any of the numbers on the National Do-Not-Call List (DNCL), unless they already have an existing business relationship with the consumer or individual.

The federal legislation creating the framework for Canada’s National Do-Not-Call List was passed in 2005. On December 21st, 2007, the CRTC awarded a five-year contract to Bell Canada to operate the National DNCL, and announced the list would be active on September 30th, 2008. The operator is responsible for registering numbers, providing telemarketers with up-to-date versions of the National DNCL, and receiving consumer complaints about telemarketing calls.

Consumers can register up to three different numbers on the list, and have to renew that list every three years. There is no cost for getting onto the list. Telemarketers are required to monitor the National DNCL and remove any numbers they find on it from their calling lists. Telemarketers have to pay for access to the list.

Real estate brokers and salespersons making unsolicited telephone calls are “telemarketers” within the meaning of the legislation. Realtors can still contact consumers in other legal ways, such as direct mail. But if consumers (including private sellers) put their phone numbers on the National Do-Not-Call List, Realtors cannot telephone or fax them to solicit business.

July 24, 2008 in Agency Matters | Permalink | Comments (6) | TrackBack

DOJ, NAR agree to settle

The Settlement Will Result in More Choices, Better Services and Lower Commission Rates For Consumers

WASHINGTON — The Department of Justice announced today that it has reached a proposed settlement with the National Association of Realtors (NAR) that requires NAR to allow Internet-based residential real estate brokers to compete with traditional brokers. The Department said the settlement will enhance competition in the real estate brokerage industry, resulting in more choice, better service, and lower commission rates for consumers. NAR has agreed to be bound by a 10-year settlement to ensure that it continues to abide by the requirements of the agreement.

In September 2005, the Department's Antitrust Division filed a civil antitrust lawsuit in U.S. District Court in Chicago, against NAR challenging policies and related rules that obstructed real estate brokers who use innovative Internet-based tools to offer better services and lower costs to consumers. The Department said that the policies prevented consumers from receiving the full benefits of competition, discouraged discounting, and threatened to lock in outmoded business models. The case was scheduled to go to trial in July 2008 before Judge Matthew F. Kennelly.

If approved by the court, the proposed settlement would require NAR to change policies and adhere to certain conduct remedies to resolve the Department's competitive concerns.

Under the terms of the settlement, NAR will repeal its anticompetitive policies and require affiliated multiple listing services (MLSs) to repeal their rules that were based on these policies. NAR will enact a new policy that guarantees that Internet-based brokerage companies will not be treated differently than traditional brokers. Under the new policy, brokers participating in a NAR-affiliated MLS will not be permitted to withhold their listings from brokers who serve their customers through virtual office websites (VOWs). In addition, brokers will be able to use VOWs to educate consumers, make referrals, and conduct brokerage services. Such brokers will not be excluded from MLS membership based on their business model. NAR will report to the Department any allegations of noncompliance. NAR also has agreed to adopt antitrust compliance training programs that will instruct local Associations of Realtors about the antitrust laws generally and about the requirements of the proposed settlement specifically.

"Today's settlement prevents traditional brokers from deliberately impeding competition. When there is unfettered competition from brokers with innovative and efficient approaches to the residential real estate market, consumers are likely to receive better services and pay lower commission rates," said Deborah A. Garza, Deputy Assistant Attorney General of the Antitrust Division. "In addition, under this settlement, NAR will foster compliance with the antitrust laws by educating its members and its 800 affiliated MLSs."

NAR is a trade association of more than 1.2 million residential real estate members who operate in local real estate markets nationwide. In almost every area of the country, brokers have organized MLSs through which they share information about homes for sale in their community. Brokers regard MLS participation to be essential to their ability to compete, and virtually all brokers participate in a local MLS. More than 80 percent of the approximately 1,000 MLSs in the United States are affiliated with NAR. NAR oversees rules governing how its affiliated MLSs operate.

The Department's 2005 antitrust lawsuit challenged NAR policies adopted in 2003 and 2005 that obstructed competition from brokers providing residential brokerage services via the Internet. One way that brokers use the Internet to provide brokerage services to their customers is through password-protected Internet sites, known as VOWs. VOWs allow a broker's customers to search real estate listings themselves instead of relying on a broker to conduct searches for them. Delivering listings via the Internet enables customers to control their search process and educate themselves about the real estate market in their area on their own schedule. These VOWs have allowed brokers to be more productive, and some VOWs have passed these efficiencies on to consumers in the form of lower commission rates to home sellers and rebates to home buyers.

The first rule challenged by the Department required MLSs to permit traditional brokers to withhold their listings from VOWs by means of an "opt out." NAR does not permit brokers to withhold their listings from traditional broker members of an MLS. Many local MLSs adopted NAR's policy before NAR suspended its policy during the Department's investigation. In one market in which the MLS adopted the policy, all brokers withheld their listings from the one VOW in the community, which was then forced to discontinue its popular website.

The second rule prevented a broker from educating customers about homes for sale through a VOW and then referring those customers (for a referral fee) to other brokers, who would help customers view homes in person and negotiate contracts for them. Some of the VOWs that focused on referrals also passed along savings to consumers as a result of increased efficiencies. Collectively, NAR's policies prevented consumers from receiving the full benefits of competition in the residential real estate industry.

More information on the Department's efforts to preserve competition in the real estate industry can be found on the Antitrust Division's Competition and Real Estate Website »

May 27, 2008 in Agency Matters | Permalink | Comments (2) | TrackBack

The Real Estate Agent Boom

Toronto agent population up almost 20% in three years

Despite increased competition and a declining market more and more people want to get into the real estate business these days. The Real Estate Council of Ontario, or RECO, the regulating body for the real estate brokerage industry in Ontario, says there has been a 20 per cent overall increase in the number of registrants in Ontario since 2005. RECO is currently processing more than 400 applications for new registrations each month. In 2003, there were about 300 new applications per month processed by the industry regulator.

In 2005, Ontario had 40,665 registrants with 11,675 of those coming from Toronto (M postal codes) and 26,792, which included Toronto and Brampton, Durham, Mississauga, Oakville, Milton, Orangeville, and York. In 2007, Ontario had 49,429 registrants with 12,472 of those coming from Toronto (M postal codes) and 29,222, which included Toronto and Brampton, Mississauga, Oakville, Milton, Orangeville, plus Durham and York Regions.

As of today, the Real Estate Council of Ontario is showing 53,932 registrants on its website.

There has been a corresponding increase in membership of the Toronto Real Estate Board:

Given a GTA population of about 4 million, that means there is one real estate agent every 150 residents — men, women and children. And they all want to list your house. In fact there are probably several looking for you right now.

Source: Real Estate Council of Ontario and Toronto Real Estate Board.

February 23, 2008 in Agency Matters | Permalink | Comments (4) | TrackBack

Multiple Representation

Or Dual Agency by another name

Whether you are a home buyer or seller, it is important for you to understand the legal nature of the agency relationship you have with your agent. Your agent must act in your best interest while representing you in a real estate transaction. This gets complicated if you find yourself in a “multiple representation” situation.

What is dual agency? Basically, it means that a real estate agent is representing both the buyer and seller in a real estate transaction, which is legal in Ontario but … A real estate agent who is working as a dual agent could easily find herself in a conflict of interest by trying to represent the best interests of both parties.

So, what should you do if you find yourself in a dual agency transaction? First, insist on clear communication at all times. Second, be explicit with the agent about your needs in the transaction. Third, check with the agency’s broker of record if you have any questions or concerns.

If all the involved parties work hard toward a smooth transaction, dual agency doesn’t need to be a problem. But, it is your right and responsibility to ask questions and make sure you are not being disadvantaged. It can be a complicated situation, so if you have questions or want more information about dual agency, ask until you are satisfied.

February 5, 2008 in Agency Matters | Permalink | Comments (4) | TrackBack

Real Estate Agency ... "eh?" to "zed"

Ever wondered what the term real estate "agent" really means?

That single word - "agent" - has great significance, and does far more than just designate an individual who holds a real estate license.  The real estate brokerage business is governed by a body of law called "the law of agency". The word "agency" refers to the relationship which exists "when one person is employed to act for another".

In real estate, the most common form of agency is established when homeowners employ a real estate brokerage to act on their behalf to secure a buyer for their property. The term "act on their behalf" is important in that it refers to the brokerage's responsibility to look after the best interests of the owners. 

Once homeowners have listed their home for sale with a brokerage firm, the brokerage becomes their agent. The owners become the brokerage's client (or principal). 

The duties of the real estate agent to the sellers include:

1) loyalty 
2) obedience 
3) skill, care & diligence 
4) disclosure of information 
5) and accounting. 

These duties are said to be fiduciary in nature, meaning that there exists a trust relationship between the client (usually the sellers) and the agent (the brokerage company).

The brokerage, acting as agent, is obligated to be loyal to the best interests of the sellers, and obedient to their objectives, i.e. to perform brokerage services faithfully to the sellers' objectives. The brokerage is also required to use the highest levels of skill, and to carefully and diligently protect the sellers' real estate interests. 

The broker's duty of disclosure relates to keeping the client informed. Because the brokerage's loyalty is to the client, all brokerage representives are obligated to disclose any knowledge in his or her possession about potential buyers, their intentions, their abilities to make a purchase, and changes in the real estate market in general. They are also required to provide a complete accounting of their activities, and of the final transaction itself.

A Buyer's Agent

But change has raced through the real estate industry in the past several years including the growth of buyer’s agency. Many consumers initially resist when presented with the option of retaining a buyer’s agent and signing yet another contract. This resistance has more to do with a lack of understanding of the role of a buyer’s agent than it does with an actual dislike of the buyer’s agent concept.

Before the advent of buyer’s agency, all real estate agents owed their fiduciary responsibilities to the seller. The agent was responsible to the seller since the seller paid the commission and had signed a listing contract designating an agent to represent them in exchange for the commission. As a result of this logic, real estate agents involved in a transaction could only be devoted to the one side of the transaction – the seller’s side! This was true even when an agent had only been working with the buyer, and was responsible for writing and presenting the offer to purchase!

What did that mean to the buyer? It meant that if their agent knew proprietary information about the seller that could help the buyer in formulating their offer, the agent was not allowed to share it with the buyer. For example, let’s assume that the agent who brings the buyer knows that the seller is under great pressure to sell due to 1) a relocation, or 2) a difficult divorce or, 3) financial pressures. Although this information could be useful to the buyer in deciding what to offer, none of this information can be shared under the traditional definition of agency. Likewise, if the buyer has confided with his agent a willingness to go higher than his original offer then in the traditional agency situation the real estate agent would be obligated to share this information with his actual client, the seller.

It wasn’t until real estate buyers began to demand fair and equal representation of their interests that the concept of buyer’s agency took hold. Today you will find real estate agents who specialize in representing buyers in most major metropolitan markets and in the outlying areas as well.

Hiring a buyer’s agent does require that you sign a contract. The contract is signed prior to services being rendered. It usually identifies a time period during which the agent will work with you to find a property.

Services a buyers agent should provide:

The contract will also spell out how the buyer’s agent will be paid commission and/or fee. Some agents will require that a small retainer be paid up front with the balance of the fee being paid as a commission upon the close of the sale. This formalizes your business relationship with the agent and also commits the agent to servicing your real estate needs. Other buyer’s agents will request they be paid a commission out of the proceeds of the sale. The commission usually amounts to half of the total fee that the seller has agreed to pay their listing agent upon the close of the transaction.

Skills a buyer’s agent should possess include:

How can you locate an established buyers agent?

You can start by looking here, on the internet. Many buyers’ agents now advertise their specialty as part of their promotional efforts. The highest degree of buyer’s agency is provided by Exclusive Buyers Agents, who specialize in representing only buyers interests and thus ensure that you never become involved in a dual agency situation (where one agent is representing both buyer and seller in a transaction).

February 2, 2008 in Agency Matters | Permalink | Comments (4) | TrackBack

Perspectives on Representation

When you call an agent from an ad or a sign, you have to remember that they are working for the seller — and definitely not the buyer. You are talking to the listing agent who was hired by the sellers to list and sell their home. His or her job — and obligation — is to get as much money as possible for the seller.  This ties in with the fact that the agent has an incentive to get more. The higher the sales price, the more money the agent will make.  It may be hard to keep this in mind as you spend time with the agent and feel you know and feel comfortable with them. Even though you begin to trust that agent, never to reveal the highest price you are willing to pay, or other concessions you know you would be willing to make. Because that person represents the seller, and must relay this type of information to the seller.

The flip side of this is also true. Again because the agent is representing the seller, he or she is not allowed to divulge anything that would tip the scales in your favour; — like why the seller is selling or how low the seller will probably go regarding the selling price. Remember, the agent is bound by contract to work to get the best possible deal for the seller.

But you have another option. When you begin your search, you can start by using a buyer’s agency who is working with your best interests (and wallet) in mind. A buyer’s agent will work to negotiate the best price, ensure the property is inspected, and make sure you have all the assistance and guidance you need. Things you tell a buyer’s agent remain confidential. Using a buyer’s agent also means that you can be shown homes that are offered by new home builders or directly by owners. It might seem like using a buyer’s agency means you are going to pay more — but that’s not usually the case.

Although there are situations where agents charge an hourly fee or a flat fee for the service, in most situations they are simply working for the same commission that is paid by the seller through their listing agent. While there is still some argument that this method leaves the incentive for a higher sales price, buyer’s agencies counter by pointing out that a $10,000 savings for the buyer only amounts to a $250 difference in commission for the buyer agent. The benefit of your satisfaction with their service and the word of mouth promotion they will greatly outweigh the small loss of money.

The type of agreement you sign with a buyer’s agent will dictate how the arrangement works. A representation agreement will stipulate, specifically how the agent will be paid. You can negotiate the terms and obligations for both parties up front so both you and the agent know what to expect and are comfortable with the relationship.

If you decide to use a buyer’s agent be on the lookout for dual agency. Usually referred as ‘multiple representation’ it describes the situation where an agent or agents are working on both sides of the fence. For example, an agent with XYZ Realty may represent the seller, while another agent (or the same agent) also with XYZ Realty represents the buyer. There are obviously arguments against this arrangement because of conflicts of interest, but nonetheless, it is still a common practice. In the dual agency situation, both the buyer (you) and the seller must be made aware of the arrangement and privileged information can’t be shared unless you agree to it. Dual agency is a situation that should be avoided if at all possible.

January 30, 2008 in Agency Matters | Permalink | Comments (5) | TrackBack

The Dual Agency Dilemma

Understand the nature of your agency representation

Dual agency occurs when a real estate agent is representing both buyer and seller in the same transaction. Since the agent has promised a duty of confidentiality, loyalty and full disclosure to both parties simultaneously, it is necessary to limit these duties in this situation, if both parties consent.

If you find yourself involved in a dual agency relationship, make sure that you completely understand how your interests are affected.

This relationship involves the following limitations:

Before receiving an offer both you and the other party to the transaction will be asked to consent in writing to this new dual agency relationship.

If you find yourself involved in a dual agency situation, make sure that you completely understand the nature of dual agency and its possible outcomes. It would be wise to contact a skilled Real Estate Lawyer for a complete explanation of dual agency representation.

January 25, 2008 in Agency Matters | Permalink | Comments (5) | TrackBack


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