Submit a proposal to CREA and or the Competition Bureau – I gotta go sell a house.

“many real estate websites that consumers have to traverse”

Try 15 differenct boards in LA. plus Trulia, Zillow, Redfin and others. One source may be as you suggest, be a monopoly but, ultimately it is the most effective venue for the consumer.

As for the only reason you read this blog…. I’m crushed.

“They should not expect to be freely handed the resource called the MLS because they feel ‘entitled’. ”

That’s just BS. No-one wants it freely handed to them, they want equal access to the monopoly CREA created. AT&T didn’t hand its networks over for free, instead it changed its business model to leasing.

I noticed you were once again unable to quote a real world example of a monopoly not being broken up, so I’ll take that for what it is: admission that a monopoly exists and no justification for it.

Then there’s this: “And just to be clear, all these contenders need the REALTOR collective to input the data.”

And what data is that? Room sizes? pictures? estimated house price? number of biffies? (which you noted, the Realtor didn’t even get right on a $22M house). Its laughable that’s your last stand to justify Realtor commissions.

Please refrain from the sob stories over maintaining a blog at your expense. The only reason I read this blog is cause there is a monopoly on access to the data that you happen to have access to. Open that data to Google, and I’ll probably never come back. You’ll notice I’ve also repeatedly complained that brokers have data I cannot access either.

I will agree with you that they should buy the lot next to the dealership, which is why I included the Grapevine example. They have, and have taken > 10% market share on a system that allows the seller to enter all that precious data Realtors wish to keep a monopoly on entering.

Ultimately though this creates another problem – many real estate websites that consumers have to traverse to buy, and multiples to choose from to sell. This is in no-one interests as it lessens the market for sellers, increases the overhead for buyers, and makes using an agent difficult as they only represent a subset of properties to collect commissions. It’ll become your metaphorical car dealership, in that Realtor A will only sell houses from dealership B.

It’s already like that in Ottawa, Realtors won’t even consider suggesting houses advertised on Grapevine, regardless if they might be in the best interest of their client.

That’s sad, and that’s the monopoly that needs to be broken up.

Here’s some alternate real world implications.

When there is a system better than MLS that offers

-as much or more relevant real estate information that helps me help my clients,
-is as well managed,
-is as cost effect
-offers equal or better benefits, protection and service to me as a REALTOR
-offers equal or better benefits, protection and service for my clients
-meets or exceeds market exposure value to the real estate buying and selling public

Then and only then, will I consider another sand box.

Until that day arrives, I suggest real world implication extends to that next great system. They should not expect to be freely handed the resource called the MLS because they feel ‘entitled’.

As opposed to hiding behind the skirt of the Bureau perhaps they should take a page from your suggested formula for success and buy the lot next to that car dealership.

Ultimately Chris, you and or others need to convince me that there is a better truck to carry the load. When you do, I’m all over it but, I remain skeptical.

So far none have achieved the level of MLS – be it the Zillows, the Trulias, the Zoocasa’s and even the Googles of the world. And just to be clear, all these contenders need the REALTOR collective to input the data. Without the REALTOR acquiring, collating and inputting all collected data, none would exist.

As to the commission discussion – Chris it is a tiresome dialogue. Suffice to say, there are many, many MLS capable discount brokers and REALTORS out there who may provide the level of service you seek. Commission rates are not fixed and you are welcome to enjoin them in negotiation to arrive at a fee you think is reasonable.

In parting, I note that, to my knowledge, none of the discounters take the time nor do they bear the expense of maintaining a blog. Such luxuries – call it a real estate service if you wish, (is that too silly a methaphor to describe what appears to offer you benefit?), is only afforded because I am paid well for the value added services delivered.

The fact that you quoted the car dealership shows how you hold onto the metaphorical point and miss the real world implications.

Anyone in business knows the best spot for your business is next to your best competitor. If this dealership has a great location, then buy the land across the street and open another dealership.

That was almost too easy. Shall we try another?

I held the Microsoft card in my backpocket, time to play it: 92.5% of computers run Windows, Microsoft essentially has a monopoly. In the spirit of your metaphorical point Microsoft could define any number of rules for others to use Windows to sell their product. Sound familiar?

“What is accepted, is that CREA’s rules of engagement may not be suitable to all models and thereby may preclude certain variations from operating.”

Case in point: Internet Explorer. Microsoft shipped IE with Windows, forcing each Windows buyer to pay for the IE browser. There were competitors, namely Netscape, yet they were at a disadvantage cause Microsoft could manipulate Windows to make Netscape uncompetitive. The Justice Department seemed to think so, since there’s NO DIFFERENCE on the ruling against Microsoft, since Microsoft paid for years to develop Windows and laid the groundwork for internet browsers (all the underlying network interfaces and protocols). Sound familiar?

“The Competition Bureau obviously would think so, since there’s NO DIFFERENCE on what they are trying to pull on the Canadian Real estate association who owns the MLS system that all licensed Realtors have had to pay for, for years.”

In Ottawa there is a company Grapevine that is catching on. Like Netscape, they are held at a disadvantage cause they cannot play by the same rules as other Realtors. In Ottawa there are about ~2000 properties on MLS, and ~250 on Grapevine. Without the power of MLS Grapevine has gotten > 10% of the market. Now imagine is CREA let Grapevine compete without a disadvantage? If I was a Realtor I’d be fighting tooth-and-nail against losing my monopoly too.

So please, stop using the silly metaphors and stick to real world examples. There’s been enough court cases of monopolies, surely CREA can find one that wasn’t broken up that operated a similar business model. If not, too bad, so sad.

As for your other comments:

Privacy:

Responding to how Craigslist protects privacy by mentioning people who don’t want a sign posted? Come on dude, I don’t post a sign on my yard when I sell on Craigslist, yet my post is publicly available like the house would be too. Difference? Craigslist manages to allow people to contact me without revealing my personal information. Why is CREA/MLS so afraid of allowing the same?

Protection:

My lawyer could charge $29K more, for the record that is 29x or 2900% more, before equaling the commission a Realtor gets on a $500K condo.

Lets take your argument for what it is: finger pointing crap.

Justification:

AT&T, Microsoft > silly metaphors that don’t hold water when a truck is driven through the holes in them.

Looking forward to reading more on this as it develops and seeing how more Realtors poorly justify their commissions and monopoly. The excuses to this point have been laughable, and will only get more entertaining.

Cheers,
Chris

I think you may have missed the metaphorical point.

It is simply not the case that discount brokers who offer alternative real estate services via MLS do not co-exist, – they do! There are and have over the years been any number of discount brokers. One of the latest most technically progressive local casualties was E-Realty. IMO, a damn fine concept which reality would not support. There are many more who survive today within the system who offer various levels of RE service. Their ‘business model’ of services and fees varies as much as do marbles in a bag.

Based in the fact that varied business models currently operate within CREA’s rules of engagement implies that competition exists. What is accepted, is that CREA’s rules of engagement may not be suitable to all models and thereby may preclude certain variations from operating. IMO this is not any different than the operation of a franchise. Within that franchise are contractual rules that govern the use of the tools, brand and infrastructure the franchise developed and provides for an initial and on-going fee.

South of the border –

If you are talking about Zillow, Trulia, Redfin et al then you must also talk about Zoocasa and Point2. ZooCasa is I believe modeled on the first two. The three rely on the agent to input the data which unlike Point2 combines both agent input and is also (I think), fed by the Saskatchewan Real estate Association. I can’t say if Point2′s system is open to the public for Sask listings but, I presume it must be. The depth of this fed data is unknown, the QUALITY of the data input to Zillow et al is suspect. Zillow, Trulia have their benefits. From reactions I hear at Inman sessions the value to the consumer while Ok is still questionable. Why? Strange it may seem but, consumers like to go to one source they can trust.
Are they popular alternatives to MLS? NAR – CREA’s big brother, is still a powerhouse. Why – Mostly the reliability of the data.

As to some of your statements:

Will MLS be replaced completely. Nothing is forever. I accept that MLS may just be a stepping stone for the next great thing.

“Bad/Good” Realtors.

A never ending discussion in and outside of this industry and a constant problem in any industry. I believe we would all like to think we are special and that includes you, problem – there are alternate opinions.

Privacy:

Privacy- you may not care about your personal privacy but, I guarantee you that you stand alone. Privacy is a huge concern to many consumers. Aside from your personal choice, we must abide by the terms set within Federal statute.

As an adjunct: there are at any time a number of listings on MLS where you will not find a matching For Sale sign on the property. Why – “we don’t want the neighbours to know our business.”

Protection:

You may want to ask those lawyers you are referring to if they are happy about paying their insurance premiums these days. And yes many had to increase their fees to offset this cost. While the RE and legal industry is self regulated with some pretty tough regulations, you can’t stop people from doing stupid things that do harm to consumers. Our insurance is there to offset that harm.

Justification:

At the risk of being repetitive I’m going to send you over to Norm Fisher’s blog. You may find that discussion enlightening. You can also get a different perspective from John Pasalis in Toronto.

I’m also certain in the days ahead you will find many more people chiming in on this topic.

I’ll leave you to reflect on this comment from the self proclaimed Real Estate Intelligence blog:

the comment: from Bill Lafferty

There’s a major Car dealership in my area that sells thousands of new and used vehicles each year due to it’s prime exposure due to location.
Even though for many years it has cost the owners of this dealership a ton of money in expenses as well as business licences to stay in business and THEY OWN this successful dealership.
My question is: Are the owners of this successful dealership being anti-competitive in not allowing everyone to park their vehicle at this successful dealership for a small fee and directly sell their own car or truck to the buyers that come to this dealership?
The Competition Bureau obviously would think so, since there’s NO DIFFERENCE on what they are trying to pull on the Canadian Real estate association who owns the MLS system that all licensed Realtors have had to pay for, for years.

Instead of silly metaphors, lets use real world examples: AT&T (I’ll save Microsoft in my backpocket)

The forced AT&T breakup allowed competition into the long distance telecom market. Long distance providers paid fees to the originating/termination networks, and leased usage of land lines. Before that, AT&T had a monopoly cause they owned the originating/terminating networks and could decide not to do allow any other company access.

The parallels to the MLS site are obvious to anyone old enough not to be playing in a sandbox.

Continuing this great example: many years later along comes cell phones and VOIP, making the breakup kinda pointless since these other technologies created the competition that was lacking.

A look south of the border shows the kinds of websites that develop when MLS is opened to competition. They offer all kinds of neighbourhood data, data that once was only available from your Realtor. One day a site might replace MLS completely.

Consumers need choice, and Realtors need competition. Win-win.
- consumers have been lacking choice and being ripped off cause of it.
- there are many bad Realtors who offer little extra value for their high commissions. Competition will remove them from the market, or force them to be better.

As for privacy and protection:

Privacy: If I want my contact info posted on the MLS site, then what are Realtors protecting me from? How is using Craigslist any different? I am available for contact without my info being posted publicly.

Protection: A good agent will help in the buying/selling process with advice. This same advice is available from a lawyer, for about $1000 compared to the 6% commission both agents will share. On a $500K home that’s $30K. I’ll take the $1K lawyer, and the lawyer will have better advice. I’ll use the $29K savings to hire a home inspector (buying) or staging company (selling).

Sorry Larry, your whole argument stinks this time.

Instead of arguing against breaking up the monopoly, how about justifying the monopoly and commissions. Your 3 justifications don’t hold water when compared to similar online services, and sandbox example torn apart when compared to real world examples (and I didn’t even use Microsoft as the example!).

Cheers,
Chris

Yup, things are slow at the presses across Canada. More important is whether they come to understand the impact the potential outcome may have on consumers. There will be lots to write about then.

From this perspective, it will be a slap on the face to all who championed laws of Agency – the idea of fiduciary responsibility and Privacy. There is a stink on the horizon.

Lets think about the North Shore newstands- Vancouver Sun = Canwest. Province + Canwest. National Post = Canwest. NothShore News = Canwest.

Yup looks like MLS is the only monopoly worth complaining about!