For years, the regulators were after the broker cartel.
The reason? The brokers owned the marketplace where buyers and sellers came together. And for generations, brokers had been using that monopoly to impose high prices on those transactions. The rates, in fact, were so high they felt like extortion. But if you wanted into the market, what choice did you have?
The above story is about the Wall Street and Bay Street brokerage firms, circa 1975, when they controlled the New York and Toronto stock exchanges.
But I might as well be talking about Canada's residential real estate brokerage industry, circa 2010, and its control of the Multiple Listing Service (MLS) of homes for sale.
This week, Canada's Competition Bureau announced that it is taking the industry's long-standing business...
by federal competition watchdog
Home buyers and sellers may soon be able to choose "a la carte" services from real estate agents if the Canadian Real Estate Association is forced to change its pricing structure, but the association says that's always been the case. Canada's Competition Bureau filed an application with the Competition Tribunal on Monday seeking to strike down the CREA's rules on the use of its Multiple Listing Service.
Those rules stifle competition because CREA uses its control of the MLS to force home sellers who want to list on the MLS to pay for a full package of services associated with buying, said Melanie Aitken, head of the competition bureau.
The Competition Bureau has been discussing the matter with the association since it enacted the rules in 2007 after...
Federal watchdog challenges real estate MLS rules.
The Canadian Competition Bureau says it’s challenging rules imposed by the Canadian Real Estate Association, a body that represents more than 98,000 real-estate brokers, agents and salespeople. The federal agency says the CREA rules limit choices for consumers and force them to pay for services they don’t want, also stifling innovation in the market for residential real estate services.
CREA represents more than 98,000 real-estate brokers, agents and salespeople operating through more than 100 local boards and associations.
The Competition Bureau is challenging CREA rules imposed on agents who list properties on the association’s Multiple Listing Service, also known as MLS.
The agency says most real estate transactions in...
Competition Bureau Seeks to Prohibit Anti-competitive Real Estate Rules
OTTAWA, February 8, 2010 — The Competition Bureau announced today that it will challenge rules imposed by the Canadian Real Estate Association (CREA) that limit consumer choice and prevent innovation in the market for residential real estate services.
The Commissioner of Competition has determined that CREA’s rules restrict the ability of consumers to choose the real estate services they want, forcing them to pay for services they do not need. The rules also prevent real estate agents from offering more innovative service and pricing options to consumers. The Commissioner’s application to the Competition Tribunal seeks to strike down these anti-competitive rules.
“Selling a home is one of the largest...