Will the Competition Bureau Kill the Competition? posted by kevinmac , Group AdministratorWednesday, May 12th 2010 @ 12:00 AM (not yet rated)    post viewed 273 times

As you may have heard, there is a little spat going on between the Competition Bureau and CREA. If I understand it all correctly, CREA wants to protect its MLS® system for its REALTOR® members and the Competition Bureau wants to make them relax the rules. Yes, it's more complicated than that, but that gives you the general gist of the spat.  All this leads me to the point of my title.

Let's pretend I belonged to a real estate board in Metropolis(even Superman needs to live somehwhere). Now we will pretend this board had certain rules regarding adding listings to the MLS® system. So, the Competition Bureau comes along and says any REALTOR® who belongs to said board, must be able to put listings on the system with no conditions.

Then, as a local REALTOR® member of this board, I come up with the brilliant idea of letting people wanting to sell their house privately list them on the MLS system through me. I decide I will post their listings, they deal with all the potential buyers and offers and they only have to pay me a small fee, if it sells. Everyone is happy. Oh wait...we are forgetting someone.

In this imaginary city there are a few private sale companies. You know the ones...they take your money and put your listing on their website. If it sells, you save a bunch of commission. If it doesn't, you still have to pay a bunch of commission when you list it with someone who can get it sold and you are out the fee for the private listing. Once I start offering my hypothetical "pay only if it sells service" why would anyone possibly use these private companies who make you pay up front and draw considerably less traffic to their website? I suppose they could always change their business model. Of course I pointed out to one of them the difference between them and a REALTOR® is the private company charge you whether they are successful or not. I suggested they try only charging if they sold the property. His reply. "We'd go out of business if we did that".  He failed to see the humour when I thanked him for making my point.

I'm all for competition and fair dealings. I'll also be the first to admit the real estate industry needs a serious overall. I'm just not sure the Competition Bureau is the one to do it. I can think of better places to spend their time...like oil and phone monopolies. Oh wait, those don't affect anyone.

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