It has been almost a year since the Competition Bureau reached an agreement with the Canadian Real Estate Association, which made changes to the MLS. The agreement allows consumers to have a “mere listing” on the system.
A “mere listing” is a listing posted to the MLS by a licensed real estate agent. (Individuals are not allowed to post their homes for sale to the MLS by themselves). In theory, the posting agent takes no responsibility for the listing, is not liable in anyway for the accuracy of the information, provides no other service to the seller and no service to the potential buyers. Simply put, a home seller can pay a real estate agent a fee and the agent will put the information on the MLS.
But that’s something, as the MLS is the most powerful tool a home seller has – 90% of all residential real estate transactions are handled through the system.
So, it’s been almost a year. What’s really changed?
**UPDATED Further Reading**
The For Sale By Owner (FSBO) franchises have increased their charges, rolling “mere listings” into their offerings.
Some discount brokerages have sprouted up, but when potential home sellers call in to an automated answering service and are asked to leave information (about their most valuable asset) on voicemail, many are dissuaded right away by the prospect of dealing with this kind of no service brokerage. There was a story recently on property wire about a discount brokerage selling homes for $399.
“Our office did a deal recently with a discount brokerage. They were paying $1 commission and we had to negotiate with the seller above and beyond that. We managed to get the deal done but couldn’t collect our $1 because the listing company had already gone out of business.”
All in all, it’s safe to say that a year later, confusion reins supreme and the impact of changes to the MLS on the industry in general has been negligible.
A poll commissioned by LawPro and TitlePLUS, which sells title insurance, recently released shows mostly indifference and confusion exists in the marketplace.
First of all, the poll found that 72% of Canadians were not even aware of the changes made to the MLS.
Those that had heard that changes were made, were unclear of what the changes were.
Personally, I’ve had only two or three potential home sellers ask me about the changes – that’s not many.
Industry insiders say that the impact in the market in the first year postchanges has been insignificant. If anything, the changes have impacted low-end, lower priced homes.
In my own poll, I found that private home sellers are often disappointed by the results that selling their own home brings. What’s the point of saving 5% if you end up selling for $20,000 less. Most say that they would never attempt to sell their own home again. It’s confusing and frustrating and at the end of the day many wonder if they saved anything. People are busy. They don’t have time to give up their weekends and afternoons for showings and visits to the lawyer…they don’t know how to handle multiple offers, the paperwork, the details, title insurance, irrevocable time.
Another part of the problem is that homebuyers know that private sellers are saving 5% so they want part of it. And then there are other problems with emotions, psychology and negotiating skills.
But I’m off topic.
There are currently about 1200 homes for sale listed on the MLS through the Kitchener Waterloo Real Estate Board. There are two main home selling franchises in Ontario. One of them has 1000 homes listed on MLS for all of Ontario. That’s not many.
Long story, short – the MLS rule change turned out to be a nonevent. Maybe someday it will matter.
**UPDATED Further Reading**
Why are realtors’ commissions so high? How to negotiate your realtor’s commission.
Can I put my house on MLS without a realtor? No. You want to be listed on your local board.
Can I list my house for a flat fee using an agent? Yes. Be prepared to do some on the work.