It’s All About Cooperation… or is it?

I think I’m turning into a grumpy old man and I blame the Internet for that.

Everything is on the internet, that stuff never disappears and as Statler and Waldorf said, it’s full of sarcastic comments and nasty responses.

I’m sure that CREA (the Canadian Real Estate Association) was well intentioned when they decided that cooperation and the MLS® system needed some help. And, in a typical political bureaucratic response, they felt the need to create a new rule to govern how Realtors® should market their client’s homes.

Don’t get me wrong; the MLS system is a wonderful tool and the Canadian version is one of the best in the world. Realtor.ca as a public facing advertising site for homes is very popular with the public. The MLS system helps our industry create a vibrant, competitive, and creative marketplace for people to buy and sell real estate.

A successful market place is based upon cooperation and bringing both parties to a transaction together. Buyers and sellers, coming together to satisfy a mutual desire to exchange goods and services with each other.

Be it a cattle auction, the stock market, even a crypto market. Crypto markets for perhaps other reasons.

The altruistic definition of a market means both sides, while working in their own interest, will not intentionally try to take advantage of the other side. That assumption is based upon both parties having equal access to enough information to make an educated decision on what value they assign to either their sale or purchase.

As long as markets have existed, so too have those who have been more than willing to short-change, short-weight, or otherwise take advantage of the other side of the transaction.

FTX Crypto exchange will likely become the most recent example of this.

As a result, most exchanges, markets, and cooperative systems have extensive rules to govern behaviour and to avoid unscrupulous behaviour. It’s not perfect and, in the majority of cases, the rules and civilized behaviour keeps the markets running smoothly.

Then something unusual happens that throws a market into chaos.

(Ahem… crypto)

Or in the case of Real Estate, a pandemic coupled with deliberate monetary policy combined with a large cohort of buyers results in a shortage of available homes to buy and skyrocketing prices. It also brought out market manipulators and some of the players in the market chose self-interest over cooperation.

The result of this market dissonance is that the governing body decides to step in and in true bureaucratic fashion implement new rules.

Click here to see the new policy

The issue I see with this new policy is that it now dictates or significantly restricts how home sellers can use Realtors to sell their property.

Currently when we list a property, we will take several days or several weeks to prepare a home for the market and we’ll often put a sign out front advertising the listing as “Coming Soon”.

The challenge starts when using “Coming Soon” signs to market the home, getting offers, and selling the property before it hits the MLS® system. Has the seller’s property been fully exposed to the market, or did has the seller be done a disservice with the ‘on’ but not ‘officially on’ the market sale?

Six months to a year ago, this was a problem. Our market was red hot and buyers were scrambling to find houses to buy. A lot of people would see a coming soon sign go up, play by the rules and wait for it to appear on the system, only to see a sold sign or worse: the sign comes down and the house never hits the market.

Desperate people do desperate things.

The squeaky wheel here is the now in the past and, in true bureaucratic fashion, the system now addresses the problem in the past-present.

The horse has bolted, now close the barn door.

It’s not like there weren’t already rules in place to deal with this. The solution is not to create new rules on top of the old rules. How about we enforce the rules we’ve got and police the bad actors, instead of assuming everyone is guilty and treating the industry like a pariah.

I get the need to keep the playing field level, and I truly believe the MLS® system makes the real estate market much more transparent and easier to navigate. This industry is not efficient at the best of times and I can only imagine how inefficient it would be if we didn’t have access to everything on the market. One of the best moves the industry has ever done was to expand the MLS system in a way that a number of Real Estate boards share the same database. I can now see listings from Niagara Falls, all over southern Ontario through ITSO - the Information Technology Systems of Ontario. The other system is the Toronto Regional Real Estate Board. These two separate boards cover more than 90% of the Real Estate market in Ontario.

There is a place for exclusive listings in our market, provided the sellers have full disclosure on what it means to not be on the MLS system. I don’t have a problem getting clients to sign off on making that choice. However, for the association to then say I can’t market the property in any fashion is not working in the client’s best interest, nor giving me the ability to serve my clients in an appropriate manner.

To me, this is a sledge hammer solution to a problem that requires a much more tactful approach.

Or maybe I’m just being a grumpy old fart and using the internet to make sarcastic remarks about change in the industry - you tell me.

Thanks for reading and have a good weekend.

Paul

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