Globe and Mail Article by Steve Ladurantaye

The Canadian Real Estate Association’s member boards have voted in favour of a deal that will open up the Multiple Listing Service and end a battle with Canada’s Competition Bureau.

The settlement comes after Competition Bureau Commissioner Melanie Aitken accused the real estate association of blocking its members from offering services that would lower costs and commissions for people who are buying and selling homes.

The key issue has been MLS, the popular website and listing service through which the majority of Canadian homes are done. Conventional real estate agents, who usually charge a commission of between 4 and 5 per cent of the selling price of the home, have been the gatekeepers of that system, locking out alternative providers of less-expensive real estate services. Ms. Aitken saw that as anti-competitive and took the case to court.

While the two sides reached a compromise earlier this month, it wasn’t official until CREA’s members voted on the deal. While the details have yet to be made available and the majority of the country’s 100,000 members haven’t seen what it contains – it is expected to be released Monday on the Competition Tribunal’s website – it allows sellers to hire an agent to post their property on the MLS and then conduct the rest of the sale on their own, if they choose.

Details of the settlement make it clear that agents should still be compensated, as sellers will be expected to tell real estate agents up front what they will be paid if they find a buyer. However, some brokers plan to offer commissions as low as one cent to get around that provision.

The deal also underlines the fact that only real estate agents will be allowed to post listings. Although it was never on the table, many agents worried that the settlement would allow anyone to post their home online without the help of an agent.

There was no admission of guilt in the settlement, and CREA maintains its rules allowed competitors to offer alternative business models.

“CREA believes the agreement reflects both current practices and intent regarding posting to board MLS systems,” CREA president Georges Pahud said in statement. “Buying and selling homes is an incredibly competitive business, with 100,000 [agents] working through thousands of brokerages. Business models are diverse and CREA members offer a variety of services.”

Ms. Aitken said Canadian consumers can expect to pay only for the services they want, rather than have to pay a commission on the whole deal when using an agent.

“This resolution is welcome news for both consumers and real estate agents in Canada,” she said in a statement. “For Canadian homeowners, it ensures that they will have the freedom to choose which services they want from a real estate agent and to pay for only those services. For real estate agents, it ensures that they will be able to offer the variety of services and prices that meet the needs of consumers.”

For further information and related documents, visit the Globe & Mail.