SmartHomeOwners

TORONTO: Consumers shouldn't expect more choice from their real estate agents any time soon, even if the Canadian Real Estate Association approves an agreement Sunday that would entrench access to an array of services, says a long-time industry critic.

``If I was a traditional agent, I wouldn't want this, of course,'' said Lawrence Dale, a Toronto lawyer who claims he was forced to shutter his discount brokerage after CREA changed its rules in 2007 to keep low-cost brokerages like Dale's from competing.

``If all the agents decide, 'We're not going to offer a la carte services,' the consumer gets no benefit. They only get the benefit to the extent that there are agents willing to provide those types of services,'' he added.

On Sunday, delegates from Canada's 101 local real estate boards will gather in St. John's, N.L., to vote on a tentative deal reached in September that would allow consumers to choose what services they want from their real estate agent when selling their home, and to pay for only those services. That agreement came after months of negotiations between the Competition Bureau and the industry body that represents some 100,000 realtors.

Canada's competition watchdog has been pressuring CREA to change rules it calls ``anti-competitive'' on behalf of realtors like Dale and consumers who want more flexible services.

Dale said it would be ``a complete and unequivocal victory'' if CREA approves a tentative agreement that he believes will allow him and other discount and flat-fee services to post on its Multiple Listing Service.

``The industry (will) no longer interfere with the way realtors do business,'' Dale said.

``Bigger picture, it can only mean that the industry is moving in a direction that will provide changes that will benefit the consumer.''

But the doors to lower-cost real estate services won't be thrust open overnight because the industry is dominated by traditional agents who are reluctant to change their business models, he said.

Realtors currently operate on the principle that selling agents will split the standard five per cent commission with the buyer's agent. But that traditional model would be threatened if more rogue realtors agree to post MLS listings by private sellers who don't want to pay commission.

Already, agents who provide low-cost alternatives are considered the black sheep of the industry and even receive threats and reprimands from other realtors.

Joe William, an Ottawa-area realtor who lists homes on the MLS for a $109 fee, said he is used to getting complaints and even hate mail from other agents and expects the volume to pick up after Sunday's vote.

``They'll say things like, 'We have a good thing going the way it is now, so why ruin it?', meaning if we all charge four to five per cent, everybody would make money,'' he said.

``If I did that and if everybody else did that ... there would be no way to get on the MLS without paying that five per cent.''

Many agents fear that if they wade into a minimum service market, they will see their incomes erode and could eventually get cut from the process altogether.

Dave Chomitz, a realtor with Royal LePage in Coburg, Ont., said he's not prepared to offer flat-fee listings regardless of the outcome of Sunday's meeting.

``There's a threshold below which it's no longer a profitable business, so there's a minimum level of service that I'll provide and I won't go below that whether the seller wants less service or not,'' he said.

However, Competition Bureau commissioner Melanie Aitken is confident that if the agreement in principle is ratified it will achieve a long-lasting solution that will strengthen competition in the industry.

``Consumers will be able to choose which services they want from a real estate agent and to pay for only those services. At the same time, real estate agents will have the flexibility to offer innovative service and pricing options to their customers,'' she said in an email Friday.

If ratified, the deal will be legally binding as of Monday and will remain in effect for 10 years, with hefty penalties for any violation.

CREA president Georges Pahud was not made available for comment in advance of the vote, but a spokeswoman confirmed that the MLS system will not be made public, meaning only licensed realtors will continue to post listings on the site.

The few details on the proposed agreement that have trickled out in briefings to local boards indicate that little will change from rule amendments CREA made in March. This should go some way toward placating the real estate representatives voting on the deal.

CREA members voted on amendments to the organization's rules in March that were expected to appease the Competition Bureau, but the bureau took issue with a clause in the amendments that said the changes are subject to the rules of local real estate boards.

The watchdog said it would settle for nothing less than a legally binding agreement so that CREA couldn't change its rules back on a whim.

But some details of the agreement that have been leaked are already making realtors, both traditional and alternative, nervous because it leaves them vulnerable.

Chomitz with Royal LePage said agents and the brokerages they represent are worried that realtors would be liable for the accuracy of information provided, even if they are paid to simply list a home and step away.

The proposed agreement also seems to say that CREA and local boards can't discriminate against agents who offer ``mere postings,'' but William doesn't buy it.

``We know they'll continue to discriminate, but it's getting a bit harder for them to do it now as more and more buyers realize they can contact the seller,'' he said.

Still, William doesn't think Sunday's vote will change much because the traditional model still totally dominates the industry.