Realtors in the greater Toronto Area may soon be able to offer consumers the option to use the Multiple Listings Services (MLS) database, hitherto reserved for professional members of the Toronto Real Estate Board (TREB) only, via the internet, to buy and sell their homes.
On Friday, the Competition Bureau filed an application with the Competition Tribunal, seeking an order prohibiting TREB from enforcing the MLS Access agreement, which it identified as “anti-competitive”.
The database contains listings, historical information about prices, and even crime statistics in a given area. Realtors use it to locate properties for buyers, and to determine fair listing prices for sellers.
TREB, which owns the database, restricts access to this detailed information to realtors.
Consumers may be given printouts of some relevant information, but under the rules of the MLS Access agreement, realtors are not permitted to allow consumers access to a search of the full inventory.
Breach of the agreement carries a stiff penalty: TREB will terminate a realtor’s access to the database.
But realtors have begun catching on to a new business model called “Virtual Office Websites”. Following this model, realtors transfer data from the MLS system into password-protected websites of their own making, which they intend for use by consumers, who assume the tasks of determining appropriate listing prices and open houses from their realtors.
According to an official with the Competition Bureau complaints have begun streaming in from frustrated realtors stating that they are restricted by the usage agreement from setting up Virtual Office Websites.
In the United States, Virtual Office Websites have helped lower costs for consumers. Realtors employing Virtual Office Websites such as Redfin are “offering significant rebates and we see no reason not to see that happen here in Canada,” said Greg Scott, Senior Communications Advisor at the Competition Bureau.
The Toronto Real Estate Board has stated that it is currently working on a Virtual Office Website policy for realtors and that it should be implemented in August.
Friday’s action follows on the heels of an agreement struck between the Competition Bureau and the Canadian Real Estate Association in October in which the Association discarded a rule prohibiting realtors selling consumers merely a listing service to post on the MLS system.