Since October 25, homeowners looking to sell in Canada have a lot more options under their belt. The Canadian Real Estate Association (CREA) has approved a sweeping change to the MLS system that they’ve so tightly controlled since its inception.
Under a new agreement between the CREA and the Federal Competition Bureau, Canadian realtors can now place properties on the MLS for a flat fee – and leave all the other work of actually selling a property to homeowners. This allows for much more consumer choice than the previous commission model. Homeowners will be able to pick and choose what they want realtors to do for them – instead of ordering the set dinner, you can order your realty services from the a la carte menu.
"By allowing [a realtor] to just post and not have to represent, then you inherently give your consent for them not to be full-service. It opens up the possibility for consumers to have a clear choice of services for different prices," said Tsar Somerville, Director of the Centre of Urban Economics and Real Estate at the University of British Columbia.
What’s the incentive to go a la carte, or just have a realtor post a listing on the MLS for you? Big savings – buyers agents fees average at 2.5% of the property, and seller’s agents fees range from anywhere between 4 and 6%. Paying a flat rate up front can save many thousands of dollars down the line and allow homeowners to undercut their competition, knowing they’ll be keeping all the profit for themselves according to Garry Marr, Financial Post Columnist.
Whatever the outcome, not everyone believes that the real estate game will change – some people are betting most homeowners will go with the expertise of full service realtors instead of picking and choosing their services. “Quite honestly, I think [the impact] is going to be quite minimal,” said Jake Moldowan, President of the Greater Vancouver Real Estate Board.