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.

Many of them don't have a clue what's going on either!!! lol

It is just like dealing with FSBO's. If they need assistance I will gladly give them the names of a few local lawyers.

Vicarious Liability v. Risk Reduction

Q: Why would a listing broker, in a fiduciary relationship with the seller, put their client and themselves at foreseeable risk via a current MLS listing agreement whereby they make an offer of subagency to any Tom, Dick or Harry, knowing full well that their client will be vicariously liable for the actions and/or inactions of their unknown "sub-agent" and the seller would subsequently hold their listing broker responsible.

Q: Why couldn't the offer of subagency be severed from a MLS listing and making it a simple notice of the availability of the seller's property for sale (like an advertisement) and not an offer of subagency, while still allowing the buyer's bona fide (Independent) representative to be duly compensated out of the balance of funds due on completion. (less paperwork and/or commission disputes)

Q: Why couldn't the listing agreement clearly distinguish between the compensation payable to the listing broker and the compensation payable to an independent and qualified buyer's representative thus enabling the direct payment to the buyer's representative from the balance of funds due on completion.

Q: Could the solution be as simple as amending the listing agreement?

In the event the buyer was self-represented and not duly licenced there would be no compensation available to such a buyer’s representative and thus resulting in cost savings to the seller, as the seller would only pay the seller’s portion of compensation on completion.

This would ensure that buyer representatives would be independent and under contract if they wanted to be paid.

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 .

Devil,

You are way to smart to be an agent, you make a lot of good points that I don't totally understand. The reality of talking directly with the owner, who is terrified but pretending not to be, is freaken weird. You get the impression that you will have to do everything for this deal to come together. Feels like you are cheating on your wife or something horrible like that.

The idea of giving them a lawyers name is probably the best advice, then you
can stay out of their bedroom and do your job as you are supposed to.

The women told me if they need additional help Sutton Group would step in
and help, guess this might cost more.

Anyhoo she was a very beautiful women and had me under her spell in 2 minutes flat, sorta like a haloween witch would do, and she knew it, my brain stopped working and I became a retarded realtor.

True Consumer Protection

Today a real estate practitioner who still thinks they are a salesperson, is out of step with reality as they are deemed by the courts to be agents in law and are judge accordingly.

Law societies have long recognized that the bulk of the claims filed against their members have been related to real estate transactions.

In the event unrepresented parties endeavour to negotiate and close real estate transactions for themselves and consequently ending up in costly litigation will find that they only have themselves to blame.

The current backlog of cases before the courts will increase significantly and the parties lacking the benefit of any type of error and omission insurance could find the experience emotionally and financially devastating.

In due course, the consumer will recognize the benefit of transferring the risk and liability onto a professional and insured real estate practitioner as being in their best interest and a matter of self preservation.

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 .

Now I understand what you are saying and it makes sense.

If these guys list with a "for free" company isn't the company
liable for any wrong doing by the vendor or do you think
the listing company has them sign a waiver of sorts.

I hope you are right with were the responsibilties lie this
is only fair and will make astute people think twice.

Hunter 12
There will most likely be changes in the documents currently utilized together with new documents to be drafted as the situation demands.

In some instances the scope of the agent's service may be very limited and the corresponding liability, if any, will also be very limited.

A "Customer Representation Agreement" would not prevent a customer from purchasing advertising through a brokerage firm to be placed on the MLS System together with an appropriate "disclaimer" together with an "idemnity clause" relating to the brokerage firm liability.

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 .

In some instances the scope of the agent's service may be very limited and the corresponding liability, if any, will also be very limited.


Thats sounds good, it puts the vendors in the frying pan were they belong.

One thing I have learn't by age 45 is that nine times out of ten you usually do get what you pay for. I have often had to pay twice to fix the cheap mistake.

You should be a manager, you know your stuff.

FREE LISTING SERVICE

The Toronto Star has today revealed that a full service brokerage firm will now advertise their totality free “MLS Listing Service”.

Historically, most FSBO have found that selling their home is not the easiest thing in the world and when their home doesn’t sell, they have been known to list their home with a full service brokerage firm.

Now, if these FSBO’s took advantage of this particular brokerage firm's "Free Listing Service", and their home doesn’t sell, who do you think they are likely to turn to and list their property.

You got it, the friendly brokerage firm, who gave them the free listing, that’s who.

Only time will tell if this is a smart marketing plan.

The problem with this is that it could completly undercut there regular business ... dangerous times.

You folks up north shouldn't be worried about agents offering free listings. What you should be worried about are companies that do not need to make a living selling real estate offering free listings...

Besides - it's the industry's ability to control the buyer pool that really keeps the status quo from changing.

Update re Is Change Inevitable

Here is a view posted Nov 2/10 by PJ Wade on RealtyTime and titled "Real Estate Commission Dilema"

http://realtytimes.com/rtpages/20101102_commission.htm

I recently received a new standard form 202 dealing with some of the changes and called a "Seller Commission Agreement with Co-operating Brokerage For A Listed Property"

Stating in part, that "this is only an agreement to pay commission (Commission Agreement). The seller acknowledges that the Brokerage is not representing the seller and not providing services to the seller."

I suspect that there will be additional standard forms forthcoming for every situation.

Hey Devil,

We have had discount companies come and go over the years
and in some ways I don't see this changing. The last one
in Toronto was Savvy and that was a while ago. Not sure
if Right at Home is into the same stuff but I get that
impression. Could it be the more things change the more
they stay the same.

As my wise friends say there is a price to everything in life, these are the laws of the universe.

Hunter.

Were did you buy your brain from I need to get one like yours.
I'm acually married to a German Lawyer who cant practice
in our neck of the woods so she is in the process of becoming
a paralegal.

This reminds me of when VCR's first came out the media said
it would kill the Movie Theatres, didn't happen.

A auto manufacturer brought out a car a about ten years ago that was supposed to be maitenance free for the first 150,000
miles and the newspapers all talked about what would happen
to mechanics if this continued, mechanics are still busy
fixing cars.

It's been my experience over the last 20 years of real estate
that every few years these things pop up and then disapear.
Remember all the hype/confusion over buyer brokerage, nothing
really changed just more forms to fill out.

Correct me if I'm wrong.

The Form 202 is new.

So, in the future, the buyer agent should go to the seller directly to ask for commission.
How do you feel?

Jane Chen

Hypothically speaking, Form 202 could feasibly increase the number of contractual buyer agents, who for 2.5 percent commission would represent the buyer.

The buyer’s agent could then approach a self-represented seller on behalf of their buyer client and present their buyer's offer, PROVIDING and pursuant to their buyer’s express instructions, the seller signs Form 202 agreeing to pay 2.5 percent commission to the buyer’s agent.

The self-represented seller could in theory, reduce their selling costs to 2.5 percent as opposed to 5 percent and the buyer would be saved from making up any short-fall in the buyer’s agents agreed commission of 2.5 percent.

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.

Sounds good on paper but the logistics of getting the form
202 signed prior to showing homes is not practical. This
will result in the cheapscate vendor getting less showings
and less money for their piece of junk home.

There is a Chinese women running a gig called Jmas Real Rstate, she offers $1 for the co-operating agents which is really quit generous, guess this is how they do things in China. As they say in the world the pieces of the pie are getting smaller as China and India want a bigger piece, so we might have to get used to eating bread crumbs. Good thing is we will loose a lot of weight and look like match stick people.

We have outsourced many jobs to India/China but at the same time the two largest
groups coming into Canada are from the same countries, so we have lost jobs to
them and the jobs we have left they also want, lucky we have a good welfare system for people to live on.

What Happens If .....

The self-respresented FSBO's started offering 2.5 percent to the selling brokerage firm?

And the possibility that such sellers will gladly sign Form 202 in an effort to save themselves money?


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.

That's happening already, Sutton Group Platinum had a place for
sale in the Beaches offering 2.5%, you had to deal with the terrified housewife who was out of her deph, weird thing is the
house has sold cond already. The lady said if she needed help
Sutton would step in, I'm sure this is what happened judging
by her fear.

You are missing the point Jmas Chinese Realty is offering $1, you
have to negotiate with this clown for your breakfast without punching him in the head. Real estate is hard enough without this
bs. Who is going to take the time to work out a deal with this
moron and then go over to get the form signed, not me I'd rather
work on rentals, they at least pay. Most people who want to sell
there own home have more issues than most or are off their medication.

There is no Friggen way I'm working all week for a bowl of rice, I'm
gonna hold out for a hamburger at least.

There was a realtor in California who punched a vendor in the head multiple
times, the poor guy lost his licence, I say he should get a medal.

pretty interesting discussion. the basic question is "why do consumers use real estate agents"? if you take away the protections and open up competition - many don't want to or need to. flip the buyers agent commission to the buyers responsibility side and things will get more interesting.

you are likely not to see any major changes for sometime... but demographics are not on our side. you have new generations coming that are tech savvy, know how to get information, want to save $$, and want what's best for them vs. the real estate industry.

just a matter of time folks.

Broker,

The lawyer I have used for the past 20 years mentioned to me the
other day that PEOPLE HAVE NO IDEA HOW MUCH HAND HOLDING WE
DO TO PUT A DEAL TOGETHER. My wife and her two sisters inherited 3 homes from their gandmother, put them up for sale, it took 6 months to sell them due to the three of them never being able to come to an agreement/fighting on every single issue, like any normal dysfunctional family, the poor agent that had to
work with these wicked witches earned every penny he made.


What I'm waiting for is the pain free/cheap dentist, if they can fly monkeys to the moon then this one will be easier than baking a cake, bound to happen soon.


Hunter.


Just got an e-mail for a new condo building at the Ritz Carlton offering 4%
to co-operating agents, guess we just got a raise, maybe the sky will not
fall in after all.

Hunter,

Consumers don't care what you have to go through and just the fact that this was pushed through in CA means they want more affordable options. There is value to having someone be a buffer in a transaction but at what cost to the consumer? Many people feel agents just complicate things in an attempt to justify their commissions.

Not sure what point you are trying to make with your dentist comment. Seeing as it takes 4 years of schooling plus 3-4 years specialty school for dentistry, plus a huge investment in equipment, assistants, and malpractice insurance and the fact that you can't drill your own teeth - it doesn't make any sense. Anyone with a high-school education and zero experience can get licensed - big difference.

Agents that want to flourish moving forward will need to specialize and provide real value to consumers... especially if consumers have to pay actual $$ out of their own pockets vs. the free equity that's been generated all these years through inflation. You may not want to accept the changes coming but there are 100 agents behind you ready and eager to take your place. Not going to happen overnight but it's a trend that can't be denied.

All people need to do is step back and stop thinking like an agent and look at the system from a unbiased view to see how this business REALLY operates in a protected fashion.

My brother works as a stock broker, his industry was deregulated many years ago. People can now trade their own porfolio's themselves through discount services. I have very little knowledge of this industy and have
no interest to learn but I'm glad to pay him to tend
to my money as are many others. My brother and his friends
in this industry earn very high incomes and are continuing
to do well. Yes you are right they offer me a service
and I pay for it, to me it's worth it. I have a friend
who manages his own money, he is on the computer every
night tending to it, I don't have the time or interest
to do what he does, there are a million things I'd rather
be doing with what little time I have to myself. So yes to me
this service is of VALUE to my life.

A friend of mine who is a Vice President of a major sporting
goods firm lost one of his teeth. Even with his high income he
cannot justify paying $3000 to have an implant put in. To him
the cost doesn't equat with the value, so he wont have it done.

I had a root canal done in downtown Toronto, It cost me $1,250 and
it took the endontist 30-45minutes to complete the procedure, this
cost doesn't make sense to me at all even though she has expenses.

Some people will happily pay for our service others not, that's
okay with me. I used to change my own oil and do all the maitenance
on my car and am now happy to pay to have it done, it takes time
and energy.

My best friend sold a B&B in Nova Scotia, his wife put it on the internet
and got an offer from a German lady who was running away from her crazy
husband. The deal was written up in February of this year it only closed
this month. They had so many problems you cannot imagine. They each used
a lawyer to do all the paper work and negotiating over the last 8 months,
this cost them a bundle and almost caused a divorce for my friend. The German women was living for free in the B&B with her kid and mother so that portion of the house was not producing for the entire high season, plus the roof started to leak which cost him an extra $10K, I can go on for ever. He flew
here last month for the weekend just to have a break from it all, he was
going out of his mind. Part of their problem was they thought they had a sale and had bought an expensive second home and were now carrying two propeties.
He will be the first to admit that if he had used an agent this would
never have happened, it almost wiped him out financially and emotionally
and came close to ending their marriage. Yes you can sell your home for
free, ha, ha. If my friend had to look at the final bill he would shoot
himself in the head. ( the buyers legal bill was over 20K, Greg wouldn't
tell me how much he paid, the property sold for 480K)

There is a price to everything, law of the universe, and there is no
getting around this one.

Hunter 12

Do you receive the OREA publication called "Realtor EDGE" which in the current issue states "Many OREA Standard Forms revised for 2011"

Apparently they recognize that changes is Inevitable and are developing new forms.

In the same issue it indicates that the financial penalties imposed by "RECO" on those that have crossed the line, is doing quite well.

Thanks for this information, I'll need to look for that issue. I still find that there is a lack of good information available.

Interesting story here:

http://www.montrealgazette.com/business/Manitoba+blocks+Ontario+realtor+post/3798711/story.html

Not certain how posting a listing on the Ottawa MLS board would help to sell a Manitoba house.

This may get interesting.

In that it could involve the Manitoba government, the Canadian Real Estate Association, the Manitoba Real Estate Association, together with other local real estate associations and the Federal Competition Bureau, who may believe that the offending Manitoba legislation in this instance is outdated and requires an amendment as it effectively stifles competition contrary to Canada's Competitions Act.

The purpose of the federal Competition Act is to maintain and encourage competition in the marketplace. It covers real estate boards, companies, brokers/agents and salespeople.

In the past Provincial governments have been extended time to bring their laws into compliance with prevailing federal law.

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.

Devil,


I find Orea and Crea by and large to be a big waste of time, they need to justify their existance by changing forms all the time, this doesn't help
me as a sales rep. Many of the changes are beurocratic jiberrish and dont
make sense. Remember Grow Op's how many publications did we receive on this
issue, it was ridiculous.

If some thing major comes along granted adjustments need to be made but not
for the sake of giving these guys something to do.

Most of the educations courses they offer are retarded, Gabrial Jeans of E-2000
is offering some great stuff and they are trying to shut her down, the whole thing just irks me.

Devil,

The previouse post wasn't aimed at you, I respect the clarity of your prose and the points you make but have issues with the
suits at Orea, Crea and Reco. To my mind these guys should all
have to knock on a minimum of 100,000 doors before they are
allowed to qualify for their jobs.

Hunter.

Interesting article in Moneysense Magazine re this topic...

The debate continues, but I guess only time will tell...

http://www.moneysense.ca/2010/11/08/how-to-pay-your-realtor-less/#idc-container

I had an interesting discussion on this topic the other day and I wanted to get this boards opinion on this.

I spoke with somebody who was arguing that if a seller enters one of these MLS listing only Fee for Service arrangements other agents can approach the client offering them other services. ie just because somebody is in a MLS listing only service it does not prevent me from offering a seller my fee for negiotation service, fee for open house service and a fee for showing service.

Thoughts?

Kjmendy,

I was under the impression that all MLS listings still had to be submitted by a licensed Realtor? At least it's still like that here in Vancouver, BC.... Therefore, we can't solicit our services to people that current;y have their property listed with another company.

Jeff

The person that you spoke with is incorrect. Have a look at Merv's comments from December 6th, 2010 regarding this exact question. In order for a property to be listed on MLS, even in a mere listing agreement, the brokerage must act as the agent of the seller. As such, it would be a violation of REBBA to contact the client of another brokerage for the purpose of a trade in real estate.

I cannot find Merv's comments.

Thank you both for your response.

It was presented as a very convincing arguement, but my gut told me it was incorrect. Thanks for your help.

Go to the Members Only section of the OREA site, then along the left hand side there is a link called 'Previous Questions'.

For those of us who are members of OREA, but have not yet received this month's copy of the Realtor's Edge publication which has an article directly on point in the current December 2010 Issue titled:

"Whate does the CREA competition agreement mean to REALTORS?" and contains a list of questions and answers.

This article is found in section for menbers only and is listed in the left column "Edge"

http://www.orea.com/index.cfm/ci_id/8060/la_id/1.htm#crea

Thanks for your help.

I just read the Q&A and it appears the person I was chatting with read the Question and forgot to read the Answer. I'm going to have to show it to him in print now.

Here is a legal website that also address the subject of "New" Agency Law as it applies to agents.

This site is a good source for additional information.


http://ontariorealestatesource.blogspot.com/

Ah, Brian Madigan...I thought that I recognized that blog site. A very good resource for legal discussion and I have had a few of my own discussions with him in the past!!

In order for a property to be listed on MLS, even in a mere listing agreement, the brokerage must act as the agent of the seller. As such, it would be a violation of REBBA to contact the client of another brokerage for the purpose of a trade in real estate.

Is that the way it's going to work in CA? Here in the US we have "entry-only" companies who's only function is to get the property onto the MLS and then distance themselves from the transaction - so the last thing they want is to deal with the seller. They encourage other agents to contact them directly for showings and offers.

Every agent in the US ought to read that blog post regarding what agency covers in a transaction... many will be surprised. There is a distinction of being licensed vs agency and even some of those "lawful" duties can be questioned for the need of them to be performed by a licensed individual.

In Ontario, all persons holding a real estate licence are deemed “registrants” and are registered under the Real Estate and Business Brokers Act 2002 (“Act”) and the Real Estate Council of Ontario are the regulators charged with enforcing everything in relation thereto. Further, the Code of Ethics within the (“Act”) was legislated into law as statutory regulations.

The Real Estate Council of Ontario's mandate is to protect the consumer and they are kept very busy doing exactly that.

The prevailing regulations incorporate many of the duties found in the common law of agency and the caselaw that has been established by the courts. Therefore all “registrants” would be well advised to be familiar with and abide, where applicable, by the law of agency.

Basically, the courts have said irregardless of what real estate agents may believe or not believe, or are taught, the common law of agency shall prevail before the courts.

The one saving feature is that there is nothing preventing two parties from voluntary forming a agreement, and sometimes referred to as the “Terms of the Trust” that may infringe and/or deny a fiduciary duty whereby the intent and meaning of the parties is clear and unequivocal, an example being consent to a dual agency relationship, where the agent has a conflict of interest, but is permissable with the express consent of the partie and providing there was appropriate, full and timely disclosure made to all parties.

I am assuming that the appropriated documentation and/or waivers will be available and put in place, so that willing parties to a transaction can agree to most anything.


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.

[quote=Devil's Advocate]For those of us who are members of OREA, but have not yet received this month's copy of the Realtor's Edge publication which has an article directly on point in the current December 2010 Issue titled:

"[b]Whate does the CREA competition agreement mean to REALTORS?" [/b]and contains a list of [b]questions and answers[/b].

This article is found in section for menbers only and is listed in the left column "Edge"

http://www.orea.com/index.cfm/ci_id/8060/la_id/1.htm#crea

[/quote]

Any chance you can post the contents of this article here? I'm still working on getting licensed and I do not have access yet to the OREA members area.

Thanks!

Hi I am New to this site. Here is a copy of a letter I sent to RECO reguarding a local FZBO site. They are using a broker in Hamilton to put properties on the MLS so they can get the listings onto realtor.ca ( MLS.ca). They do not care to deal with agents. They just want the buyers to go direct to the seller and cut out the agent.

To The Real Estate Council of Ontario
Registrar
Complaints Fax 416 207 8851

I have just recently met with a potential client that owns a property here in Peterborough. She called me out to have a look at her property and talk to her about helping them sell it When there she mentioned to me that she has her property listed for sale with The Property Guys. She told me that she had signed a paper and paid them $400 to put her property on the MLS through a Brokerage in Hamilton.

I went on the web site for The Property Guys and they are saying they will list your property through one of their partners on the MLS. Here is the headline of their ad where they actually say they will list your home on the MLS

PropertyGuys.com announces access to the MLS®
List your property on both PropertyGuys.com and the MLS for a flat fee. Click here for details.
MLS is a registered trademark of the Canadian Real Estate Association. PropertyGuys.com is not affiliated with, or endorsed by, the Canadian Real Estate Association.

My problem I am having with this is that The Property Guys are now doing what Reco considers as trading in real estate, They even come right out and say they will list your property and put it on the MLS—The following is taken from the Reco web site

The Real Estate And Business Brokers Act, 2002
(the “Act”) defines “trade” in Sec. 1:
“trade” includes a disposition or acquisition of or
transaction in real estate by sale, purchase,
agreement for purchase and sale,
exchange, option, lease, rental or otherwise
and any offer or attempt to list real
estate for the purpose of such a disposition,
acquisition or transaction, and any
act, advertisement, conduct or negotiation,
directly or indirectly, in furtherance of any
disposition, acquisition, transaction, offer
or attempt, and the verb “trade” has a cor-
responding meaning.


Are they not attempting to do almost everything on this list?

Also it is interesting to note that unlicensed assistants ( people that help a licenced sales rep) are not to participate in any way in a listing presentation or offer yet that is exactly what they are doing. They are acting like an unlicenced assisitant to the broker that is putting the listing on the MLS

I also have the feeling that the agent that the potential client had mentioned, Kim Leone broker of record of Harvey Real Estate located in Hamilton is paying some sort of bird dog fee to The Property Guys for these listings.

A lot of these Private sale companies seem to be walking in a gray area as to what should be considered as trading in real estate and should be licenced brokerages under the Brokerage act.

The Property Guys are being part of the Listing/Selling/Buying process by soliciting, communicating directly with and getting paid by sellers and helping them list their home on the MLS. They are now involving themselves in the marketing and selling of properties and are saying as much on their web site.


I am concerned that Reco will not do anything about this and will let it slide for fear of the competition Bureau.

I have no problem with a Brokerage putting a listing on the MLS and offering any commission they want as long as everyone plays by the same rules. Make companies like The Property guys play by the rules you have laid out.


Sincerely

It would be a good idea to close down the public mls ( www.realtor.ca) before the Walmarts and Home Depots decide to get into real estate. If people want info on properties for sale make them come to us like the use to in the pre public MLS site days. Crea should leave the marketing of the properties we list up to the Brokers and sales people. Any one agree?

TJE

You raise an interesting question and based on what I have gleaned from your post, the answer in this instance, would most likely depend upon the legal interpretation of Real Estate and Business Brokers Act, 2002 “Trading in Real Estate” in a court of law, should it ever come to that.

It might be argued that the advertising of a property for sale , in and of itself does not violate the (“ACT”) classified newspaper advertising comes to mind, and with the electronic age websites have become a advertising media capable of soliciting advertisers and placing their advertisers ad on their website for a fee, providing , in the case of real property, the advertiser is not involved in the real estate transaction itself.

It also might be argued that pursuant to the Consent Agreement recently signed between the Canadian Real Estate Association and the Competition Bureau, that a real estate brokerage can list a property on the basis of specific and limited service, which in this instance would be the brokerage firm listing the availability of the seller’s property on MLS and thus increasing it’s exposure in the market place.

Real Estate Council of Ontario has a mandate to protect the consumer and therefore one must consider who is being hurt in your describes scenario, certainly not the consumer who desires to increase the exposure of their property in the marketplace and neither are the advertisers who are earning a fee for advertising the property.

In the foreseeable future, we may see other consumers who through advertising in one form or another, who are clearly seeking "only buyer’s" for their advertised property, as opposed to listing brokerage firms wishing to list the property for sale via a listing brokerage agreement.

It is also foreseeable that self-represented sellers will request that all offers be irrevocable for 72 hours and/or subject to approval of the sellers lawyer.

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.

That ship has sailed. Consumers want access to more info., not less. I hear what you are saying and never thought idx was a good idea... but agents wanted easy and are now paying the price - many with their jobs. See my sig.

I agree, that the ship has sailed, also there is no use locking the barn door AFTER the horse has been stolen,

If memory serves me right, years ago, North American real estate practitioners were compared to their counter-parts in the United Kingdom (England) where the agents fees were so much cheaper.

The reason their rates were so much cheaper at that time, was they didn’t advertise. If a consumer wanted to buy a house they had to make the rounds of visiting the agents in the area of their choice and the agent, pulled a list from his desk drawer to see what they had available. There were no signs posted on the properties either, so the public were forced to attend the “Estate Agents” office for any information.

In North America, it appears that with operating costs that are continually on the rise, and agents that are continuing to offer things for FREE, as lead generators, these agents fail to realize that they are increasing the consumers expectations of things for free, with no value whatsoever being placed upon the agent’s knowledge and time.

One wonders if it isn’t it time that agents begin acting more like true professionals and set a value on their knowledge and time?


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.

THE GREATEST THREAT TO REAL ESTATE

As we know it today, is "Consumer Education", with consumers taking more control over their real estate transaction.

Imagine, a consumer listing their property for a flat fee on MLS and adding that it is “Broker Protected” in that they are willing to pay a buyer’s agent 2.5 % of the gross transaction proceeds on completion, together with applicable taxes.

Imagine that, such a seller advising that all offer be made 72 hours irrevocable (for their lawyer to read) and that all deposits to be made by certified cheque within 24 hours of acceptance by the seller, in-trust to the designated stakeholder for both buyer and seller.

Imagine, if complete control of the compensation was removed from the listing broker, and that the listing broker was offered only 2.5% of the gross transaction proceeds and a similar amount on closing, payable to a bonafide buyer’s agent representing the buyer, in a fiduciary relationship and directly from the balance of funds due on completion.

Imagine, that both parties to a transaction must be independently represented in a fiduciary relationship, or they don’t get paid, meaning no more double-ending a transaction, no more permissible conflicts of interest.

Imagine, the buyer’s lawyer holding all funds in trust as stakeholder for both buyer and seller.

Imagine, consumer’s with standard offers of their own, drafted in their best interest by lawyers, and their buyer agents required to present and negotiate the terms of the buyer’s offer or be in breach of their fiduciary duty and thus forfeit their rights to compensation or possibly sued for damages by their principal.

Imagine, buyer’s insisting on a fiduciary relationship only, and the corresponding documents reflect that.

It has been noted, that some buyer’s agents in preparing their buyer’s initial offer, are drafting the offer in the very same way it which they drafted offers as a sub-agent of the seller, and that will probably change after they are successfully sued for a breach of fiduciary duty and damages, plus a complaint being filed against then with the Real Estate Council of Ontario.

You make have noticed that trade associations are in favour of the status quo and have not done much in the way of teaching agents the various deletions and/or amendments to be made to the trade associations current standard forms, when representing a buyer, other than perhaps financial and/or inspection clauses, but not much in the way of specifically buyer weighted clauses that would protect a buyer. Buyer agents are left to learn that on their own.

Unblievable, as it may seen, the time may actually come, when agents may either have to shape-up or ship-out.

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

Real Estate Trade Associations

are for the most part reactionaries as opposed to visionaries.

Here is a 2007 vision that was perhaps a head of it's time.

http://realtytimes.com/rtpages/20070525_zillowfuture.htm

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 .

It appears that some changes, may already be in the works, as indicated at the following website.

http://www.lawtimesnews.com/201101178183/Headline-News/Lawyers-cashing-in-on-MLS-challenge

This can't be because according to the posters in this thread, there isn't enough money in a transaction to make it worthwhile for a lawyer to get involved and they viturally never are used because no one wants to use them.

Reality is that they are used all the time in transactions where agents are not involved... maybe now more-so with the Canadian law change as consumers get more empowered and educated.

But again - every area is different. Demographics, equity levels and market conditions will dictate the effectiveness of different business models.

It has been said that lawyers do not make enough money with real estate transactions,

but of course each area is different and it appears that in this instance The Real Estate Bar Association of Massachusetts is protecting it's interest with regard to a billion dollar Massachsetts real estate closing industry and has a pendind lawsuit, details at

http://www.massrealestatelawblog.com/201...ued-before-sjc/

The Mass attorneys are suing because

"Massachusetts’ long standing practice is for licensed attorneys to oversee and conduct the residential real estate closing process. NREIS’s business model is to outsource the vast majority of those functions to back office workers who aren't trained attorneys. REBA argues that this practice violates Massachusetts common law and consumer protection statutes requiring that attorneys perform the most vital functions of a real estate closing transaction, such as certifying and analyzing title, preparing the deed, handling the transfer of good funds, where necessary, and conducting the closing."


Well, here in NC we have attorney's handle our closings and it is rare to actually have an attorney involved. The paralegals do most of the paperwork and most of the actual closings including recording the deeds.

Before I was in real estate I bought a lot and built a house on it. Two closings with the same attorney and I never once spoke with him. The dingbat working for him screwed everything up.

So, while our attorneys do not 'outsource' the work, they do not do it themselves.

I just read the article and it seems that the CREA changes are creating an opportunity for lawyers. However, it doesn't seem to be making the process any cheaper for buyers or sellers since all they are doing is paying a lawyer and not a realtor.

Not to mention in this situation the buyer will now need to fork over money for their own lawyer.

Locally most real estate transaction were delegated to a particular legal secretary under the direct supervision of their lawyer employer and with the lawyer personally responsible for any error’s or omissions.

A client is made aware of who has been assigned their transaction and that if they have any questions concerning their transaction that the particularly real estate secretary is available to help them.

Now, all property transfers are done electronically with each lawyer who has been approved and assigned a coded password to utilize the special software required.

What I would foresee, in the event of lawyers becoming more involved is that they will apply their fiduciary duty and due diligence and will modify the standard form of Agreement of Purchase and Sale used locally and which certainly favours the Seller.

In the race for the bottom
"to quote the lowest possible fees"
even the title insurnace companies are having their margins squeezed.

One remark recently overheard was Hey I'm making a hundred per real estate transaction I don't have time to read the status"

yet consumers seem preoccupied only with price.

Continuing Change - Update as of Fri May 27/11

The federal Competition Bureau is taking Canada's largest real estate board (Toronto Real Estate Board) to court in a landmark case that could potentially see cheaper fees for consumers.

The bureau is alleging that TREB is restricting how its agents can provide information from the MLS system to their customers, "thereby denying member agents the ability to provide innovative brokerage services over the Internet."

"TREB's leadership continues to impose anti-competitive restrictions on its members that deny consumer choice and stifle innovation," said Melanie Aitken, Commissioner of Competition, in a statement. "Consumers are demanding a greater selection of service and pricing options."

The full article may be read at the following website:

http://www.moneyville.ca/article/998706--watchdog-sues-toronto-real-estate-board-to-open-mls

FYI:

Bill Johnston, President of TREB is a lawyer, and Lawrence Dale is also a successful litigation lawyer who has sued TREB before.

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.