Real Estate NewsCanada"s Real Estate Industry Could See Big Changes In 2004
For many years, Canada"s real estate professionals have been warned that emerging technology will dramatically change the way they do business. This is the year that could happen as regulatory and legal decisions, prompted by emerging technology, could hit Realtors where it hurts -- in the pocketbook.
Recently REM magazine, the real estate industry"s trade publication, surveyed Canada"s top CEOs to see what they consider the most important issues of the coming year. Near the top of everyone"s list is the impact the Internet is having on real estate listing databases, and how the industry will cope with virtual office websites (VOWs) and Internet Data Exchanges (IDXs) that display data from the country"s Multiple Listing Service (MLS).
It"s a controversial problem in the U.S. as well, where the Department of Justice is investigating the National Association of Realtors" policies involving VOWs. Canada"s proposed regulations from the Canadian Real Estate Association (CREA) are considerably different than those in the U.S., allowing real estate boards to set their own policies. But CREA has come under fire for its rules for mls.ca, the national Internet real estate site.
"With the availability of all the listings on mls.ca, CREA continues to distance itself from the Realtor by controlling the information, while not permitting the Realtor to display the same data on their own websites," Scott Shaw, president and CEO of Sutton Group Canada, told REM. "CREA"s current position of only allowing themselves to display all the listings, while Realtors can"t, is a slap in the face to all."
Earlier this year, CREA won an injunction against Sutton Group Quebec that barred the company from the unauthorized use of mls.ca listings on its website. The company had been "screen scraping" listings from mls.ca and reframing them to appear as its own listings.
Policies involving the MLS are also part of a lawsuit launched in the fall against CREA and the Toronto Real Estate Board (TREB). Realtysellers, a Toronto brokerage that offers consumers the choice of a full-service 1.25 per cent listing fee or a $695 flat fee MLS listing service, claims that the real estate organizations changed "the rules governing access to, and the conditions for use of, the TREB-MLS system so as to discriminate against Realtysellers and its programs", and that they conspired to "maintain fees and commission rates traditionally enjoyed by real estate agents and brokers at the expense of the public and to the prejudice of Realtysellers and its programs."
The case has yet to come before the courts, but Tom Bosley, president of Bosley Real Estate in Toronto, says, "unless CREA and TREB successfully stand up to any challenges to the system, we run the risk of losing the MLS system."
He says the federal government"s Competition Bureau also "keeps coming at this industry to try and break it down … It seems to me that what the Competition Bureau people don"t understand is that the MLS systems across this country have been proving to be just an outstanding tool for the consumer. That"s who the MLS was designed for. It"s a system that was paid for by Realtors and is supported financially by Realtors, for the betterment of the consumer."
Bosley also says that in the province of Ontario, changes to real estate legislation this year will have an impact on the ownership of firms, advertising, and "on salespeople who, for the most part, continue to be more intent on plying their trade than understanding what"s going on in this industry."
At the federal level, regulations for the new privacy act kicked in on January 1, 2004. It will have an impact on the way all Canadian Realtors do business. See "May We Have A Little Privacy: Canada"s Realtors Prepare For New Legislation" for more information.
Pressure to reduce real estate commissions is also a growing concern. Paul Legault, president and general manager of La Capitale in Montreal, says, "Consumers want to have more and more for the money they spend. Commission rates will have to be justified, or reduced. Brokers will have to offer a better package to justify their commissions, or they will see commissions continue to decrease."
So will 2004 be a tumultuous year for Canada"s real estate agents? We"ll give the last word to Wayne Zuk, broker/owner of Realty Executives in Saskatoon.
"I don"t think that the industry issues are any greater or more complex than what we have experienced in the past … the truth is, we have an incredibly healthy market and our industry needs to work to ensure that "issues" don"t get in the way."