In the event the tentative agreement between the Canadian Real Estate Association and the Federal Competition Bureau is ratified by the CREA membership, in relation to the opening up of the MLS services, that there may be changes regarding the way in which real estate practitioners are compensated for their various services.

What changes do you foresee and how may you be affected?

Important Notice: This information is provided as basic educational information by the author and is not a substitute for the advice of an expert and/or the advice of a lawyer. There is NO representation as to legality, accuracy, correctness of the herein information and the reader is strongly urged to consult a lawyer in the relevant jurisdiction to ensure accuracy before acting on this information .

I think change is inevitable, what that change will be I have no idea. In fact I have yet to see any information what change this new deal makes.

I think that defensively in the worst case scenerio: CREA pulls the MLS database off line.

But whatever the changes are I think it will be in our best interest to accept them and be an early adaptor to the new system.

In the event of change, some of which could be far reaching.

Consider the following possible changes:

1. a variety of new services offered to prospective clients;
2. new agreements with respect to the new services;
3. amendments to the MLS rules;
4. a change in how brokerage firms may be compensated on a variety of services;
5. contingent and non-contingent retainer agreements;
6. disbursement to be either inclusive or exclusive;
7. flat fees, payable in advance;
8. Billable hours, or capped billable hours;
9. Non-refundable retainers deposits.

Important Notice: This information is provided as basic educational information by the author and is not a substitute for the advice of an expert and/or the advice of a lawyer. There is NO representation as to legality, accuracy, correctness of the herein information and the reader is strongly urged to consult a lawyer in the relevant jurisdiction to ensure accuracy before acting on this information .

There certainly are many options, I wish we had more information available to us at this point.

The focus seems to be on changing the how the seller pays. My questions is how will the buying agent get paid? One of CREA's current strengths is that the buyer pays nothing has no insentitive to go looking for FSBO's.

The solution may be in amending the listing agreement with something along the lines of the following:

Compensation due the agent(s) together with any outstanding balance and applicable taxes, shall be paid directly out of the balance of funds due on closing, as follows:

.......... per cent of the selling price, to .....ABC Realty Inc.,the Brokerage firm representing the seller(s) and .......... per cent of the selling price to ..XYZ Real Estate Ltd.,the Brokerage firm representing the buyer(s).

(This is where you have the buyer's solicitor distributing the funds and ensuring that everyone gets paid)

Currently, in the event the listing broker, for whatever reason, declines to pay the buyer's agent, and refuses to sue the seller, the buyer's agent cannot sue the sellers without the permission of the listing broker or anyone else other than their own clients, pursuant to their Buyer's Representtion Agreement, otherwise they are forced to go through the arbitration process.

Currently, an alternate solution, might be found by having all parties and their agents execute Form 320 Conformation of Co-operation and Representation prior to presenting the Offer.

Then,in the event the listing broker declines to pay the buyer's agent, it may be pointed out that there is nothing preventing the buyers from suing both the listing broker and the sellers on the basis of the form 320 upon which the buyer's had relied, together with all of their legal costs and damages that they might or will sustain in the event the buyer's agent is compelled to sue his clients, the buyers for the commission due them.

The listing broker's insurance company would no doubt be willing to settle the Buyer's claim, before the cost of settlement escalated. In the event the seller's were free from blame, they might also file a cross-action against the listing broker for breach of fiduciary together with damages and a return of the commission paid.

It also may be argued by the buyer's solicitor that this issue was a foreseeable issue and known to the buyer's agent who was negligent in failing to adequately draft the Offer in order to protect their clients interest and thereby resulting in a breach of their fiduciary duty, and not entitled to any compensation.


Important Notice: This information is provided as basic educational information by the author and is not a substitute for the advice of an expert and/or the advice of a lawyer. There is NO representation as to legality, accuracy, correctness of the herein information and the reader is strongly urged to consult a lawyer in the relevant jurisdiction to ensure accuracy before acting on this information .

I certainly hope that it doesn't come to that situation inorder for buyers agents to get paid.

My train of thought is how do we avoid the situation where a seller pays $499 to list a home on MLS, then expects to pay nothing to the buying agent.

It wouldnt surprise me, if everyone wanted services for free, but the reality is that someone has to pay.

Under the current Buyer's Representtion Agreement the buyer is liable for any short-fall in compensation to the buyer's agent.

Go to the following Website for a different viewpoint.
http://www.re-innovate.com.au/
and their Buyer's Agreement at
http://www.investor.urbantechgroup.com.a...yers%20form.pdf

Interesting site, we should certainly be looking at how real estate is done in other nations.

I got some info from the local MLS board saying that there are some errors in how the changes have been reported in the media. No details on the specifics however.

Happy to have a conversation in the Canadian section.

I expect you’ll see very little change in the way real estate is practiced.

Realtor.ca will remain a member to member trading platform.

There will be no direct seller or 3rd party access.

Realtors will have to decide if simply listing homes on the web site can be a viable business model.

For some on the edge it may look attractive.

But I see 2 reasons it’ll stall.

When it comes time to sue ~ everybody is a target. I expect brokerages to create office policy regarding minimum service requirements to reduce the liability when sizes are wrong or sellers and buyers make un-do-able deals and are looking to blame someone else.

Major franchises need to control inventory. I can see them pulling out all together and doing it themselves.

Cheers .... Dave

Wait till the sellers get asked for $150 for a prospect showing!

WHAT?

I showed one of these properties today in the Beaches by mistake, it was listed with Sutton Group and offering 2.5%
except you had to call the vendor for an appointment. Very
weird calling the owner to set up the appointment and when
I arrived they had a big FSBO sign in the front garden.

Dealing with the house wife was very difficult and uncomfortable, she was laying a heavy sales pitch on us and
all we wanted to do was see the house. I would hate to have
to deal with this lady with an offer, she doesn't have a clue
about real estate.


Very uncomfortable expereince, will avoid in the future, the
give away is booking the appointment with the owner. Sutton
has a new brand name for this method, can't remember, but
their name is on the bottom in small print.

Sounds like it was a bad experience for both you and your client.

The vote happened yesterday and it was approved. I'm still looking for more information on what the exact changes are.

Check out any one of this brokerage firms five new pricing packages.

http://www.smartsellrealty.ca/4a_custpage_70847.html

and I suspect just one of many changes to come.

Interesting note:

*Buyer's Agent's commission not included in this package.

I think it is going to be much more important to get your buyers under contract now.

The thought of having to try and put a deal together with
someone who doesn't have a clue what is going on is very
unsettling. We were spoilt when there was a listing agent
in the equation. I don't want to have to do the work for
both paries and neither should I have to.

My plan is too avoid them at all costs.