TORONTO (Reuters) - Canada’s Competition watchdog wants “anti-competitive” realtors to change the way they work, and wants new rules that could help new players to enter the market and allow for consumers to pay less.
The Competition Bureau said it was worried about the Canadian Real Estate Association’s Multiple Listing Service, which shares information about properties for sale with more than 96,000 realtors across Canada. Around 90 percent of all home sales go through this system because it is the only way for maximum exposure for potential sellers.
“It is a big concern for us because the MLS system accounts for the vast majority of real estate transactions in Canada,” Greg Scott, senior communications adviser for the Competition Bureau, said on Tuesday.
“What we would ideally be seeking, although it is an ongoing matter, is to come up with a voluntary resolution.”
The realtors like the current system because it guarantees them fees when properties change hands. These percentage-based fees have risen as house prices rise, but the realtor-controlled Multiple Listing Service means other groups have been unable to claw their way into the market.
In an internal memo to realtors, the real estate association said the competition bureau was worried that the current rules had “restricted consumer choice and limited the scope of alternative business models.”
Suggested changes would scrap rules that say a listing realtor must present all offers and counter-offers to the seller, as well as a rule that says the listing agent must assist the seller for the duration of the listing contract, said the memo, from association president Dale Ripplinger.
The association was not available for comment on Tuesday.
Changes to the rules could make it easier for discount brokers to enter the marketplace, and might let sellers list properties for on the Multiple Listing Service at lower cost.
But economists said it was too early to say what effect any changes could have on the housing market.
Existing home sales closed out the third quarter with their best-ever showing, a rare bright spot in an otherwise tepid economy, as prices and sales activity posted double-digit gains in September.
Home sales seized up at the height of the global credit crisis at the end of 2008, but the slump in prices was far less pronounced than in many other countries.
Reporting by Ka Yan Ng in Toronto. Additional reporting by Randall Palmer in Ottawa; editing by Janet Guttsman