Finally, clearer heads have prevailed and a settlement has been reached between the Canadian Real Estate Association, the governing organization for Canadian Realtors, and the Canadian Competition Bureau. Let us put this to sleep once and for all!
Competition is a corner stone of the Canadian Real Estate Industry. Effective, competitive Realtors of all brands, unbranded and not real estate entities have made the number of options for consumers unlimited. Unfortunately many in the industry have been afraid of the impact of competition, or new competition, or perhaps a better choice of words is fair competition from new sources. We might even say fair competition from old sources.
For years other types of real estate entities from For Sale By Owner groups to outside web entities have caused the real estate industry to defend its right to exist within its own limited bounds. Legitimate rules of engagement were developed by the various real estate boards to limit what was a legitimate real estate entity, sales person or Brokerage. Ethical designs were written to ensure real estate professionals were following reasonable ethical principles for the better of the consumer and the community as a whole. These rules were designed by well meaning. professionals with much for thought.
When the Competition Bureau began to question these rules, turmoil resulted. Not from the industry, which continued to progress as usual with many business models focusing on different commission rates, industry practices and business models. The turmoil came from the general public, uncertain what the changes meant.
The turmoil came from the press which read all sorts of changes into the supposed lack of competition cited. Press articles ranged from "The Industry is Collapsing!" to the "Hounds are at the door!", to "The Sky is Falling!"
So, in my opinion what is the final result of this settlement between CREA and the Competition Bureau? Positive Change!. We have reached a settlement that should allow the continued competition between the established Realtor and other business models. Intelligent consumers will decide to select what ever business model, commission rate and service level they feel meets their needs. That is the way it was yesterday. And.....That is the way it will be tomorrow!
The difference tomorrow is that we now have a definitive decision for framework that the industry will work within for a period of time. At least the model is set. the detail will be sorted out but the model for the future is set. That certainty is good for all. The presses will stop printing the story of "Big Bad Real Estate" and "Bad, bad real estate people" who "over charge the consumer" for Services you do not need." The story will change to "Be careful what you ask for as some services you do not request may hurt your chances of success in the sale of your home." That is a good news story for all!
Some may not totally like what has resulted with the thought that there will be other business models that will attack the traditional way 90% of real estate has been sold to the consumer through the Multiple List Service MLS. They will state that commission rates will erode as these so called new business models will take away some or all of their business. I suggest this has already been the case a less aggressive real estate sales people and other real estate business models already have lower fees and less services. So what will be new as these services attempt to grow and attack the traditional Realtor? Nothing! Bad business models and unprofitable real estate people will continue to be loosing entities. Great successful Realtors with higher service levels and more profitable business models will always find a way for success. Their services are valued byu consumers and Canadian society. The real estate industry will emerge the better. Or at least until the next challenge!
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