The MLS website, which shows homes that are for sale through the larger realty chains, is coming under fire again. The Competition Bureau challenges the Canadian Real Estate Association for its monopoly on selling homes thanks to MLS, which most homebuyers use.
It was announced this week that the Competition Bureau was unable to reach an agreement with the CREA. The problem is that the biggest purchase a consumer will make in their lifetime is a home and with MLS, consumers do not have enough of a choice in their homes and they are not given the opportunity to lower cost options. The Bureau wants to challenge the rules put in by the CREA which has complete control of MLS in Canada and since most of the transactions are done through MLS, this gives the CREA a lot of power in the real estate market.
Currently, real estate agents are not allowed to offer consumers the option of paying a fee for the agent to list a home on MLS. Instead, they must purchase predetermined sets of services through CREA. The Bureau wants to get rid of these rules so that real estate agents can provide consumers with innovative services and so consumers can have more choice in their home. If the anti-competitive rules put in place by the CREA are removed, real estate fees will go down and homes will become more affordable for consumers.
Naturally, the CREA feels that its rules are not anti-competitive and they do not agree with the findings put forth by the Bureau. The CREA has stated that there has been a misunderstanding in the way the Bureau understands the MLS.
In late-2009, there was a real estate agent who set up a service for consumers to list their homes online but he faced a cease and desist from the CREA. Through a lengthy legal battle, his claim that he should be allowed to provide consumers with an alternative was struck down, allowing the CREA to continue with its monopoly on the housing market listing service.
There seems to be more and more pressure on the CREA to allow more competition with MLS given that housing prices across the country are at record high levels. This makes it harder for people to get the homes they want because of higher real estate fees in place.
Time will tell who wins this battle that shows no signs of slowing down.
Posted: 2010-02-16 09:04:10
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