Mere postings on the MLS. Good or bad?

Will the Mere Posting service adversely impact real estate brokers and agents? It’s too early to tell after all it’s only been two months since the consent agreement was inked by the Canadian Real Estate Association and the Competition Tribunal.

Over time pertinent questions would include: did the stand alone service benefit private sellers as envisioned in the spirit of fair competition and were issues accompanying mere posting efficiently addressed? Savings is the primary reason why sellers would only go for this service rather than get the full service of a real estate brokers and its agents.

This service is for homeowners who don’t want to pay the average 3 – 6 percent commission fee charged by agents. In the pursuit of savings, however, homeowners have to realize that there is so much homework they need to do regarding marketing, financial and legal paper work, closing the sale, etc… and it could be quite overwhelming especially for the novice seller to sell the property on his or her own.

The consent agreement outlines the obligations of CREA to its members who only wish to provide Mere Postings to sellers on MLS, and requires CREA not to discriminate against discount real estate agents who only want to offer Mere Postings services for a an agreed flat fee. By allowing its member agents to offer this stand alone service CREA would be promoting innovation in the market and giving consumers more choices.

The agreement defines “Mere Posting” as the “listing on a Member Board’s MLS System in respect of which the Member has chosen or agreed not to provide services to the seller other than submitting the listing for posting on a Member Board’s MLS® System.” The MLS platform, owned and operated by CREA, lists about 90% of Canadian properties bought and sold, and can only be accessed by real estate brokers and their agents.

Before the consent agreement homeowners who want to post their properties on MLS need to get the full service of member agents. This means having to shell out between 3-10 percent for real estate commissions. However, since the agreement took effect in October, last year, private sellers or FSBO avoiding pay outs have the option of listing their properties for a flat fee without getting the full service. Although it’s still too early to assess its impact on brokerages, it’s been foreseen that private selling may enjoy a 15% increase. The estimate appears so minimal to have any huge impact on brokerages.

While some real estate agents don’t see any problems in offering this lone service, there are those who feel that Mere Posting shortchanges the customers because the service is not maximized. There are also views aired that Mere Posting will only benefit the “in the know” and savvy sellers, but would do little for the average private seller.

The contention is that there is just so much involved to selling a property than merely posting it on the web for sale. There is marketing involved, legal contracts, financial agreements, among other things. Charting the impact of this agreement for certain time frames will lend credibility to any opinions offered on the subject later on regarding its effectiveness in promoting fair competition and market innovation.*