
Photo by Alan Cleaver
A conflict arises between real estate agents and low cost flat fee brokerages. The federal Competition Bureau will have to deal with this problem concerning discounter competence.
Flat free brokerages only entered the market last year, as there was a major dispute between real estate agents that had to be settled by the Competition Bureau. The agreement between the Competition Bureau and the Canadian Real Estate Asociation (CREA) allowed discount realtors to introduce various low cost models. Now, they believe that they are able to accept clients from across the country, but they claim that real estate organizations are interfering and stopping them from listing the homes of their clients in other provinces.
The complaints demonstrate that there are still many problems to be solved in the alternative business models of the real estate industry. The main argument for the low cost flat fee brokerages is that they are not representing their clients provincially, but only advertising on the MLS. Once the advertisement is made, it is homeowners who manage the business.
On the other hand, the real estate industry is regulated provincially and real estate agents are permitted to sell real estate only in the province where they are based. The situation is both complex and messy, as there is a huge number of local real estate boards (more than 100) who can set their own local rules as well. Another important argument for real estate agents is that the flat free brokerages have to be registered in their own provinces.
It is obvious that the federal Competition Bureau faces a very delicate problem, which raises many other interesting questions. Hopefully, the Competition Bureau will find a solution for the market.