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Steve and Brianne Buffett outside of their new home in Mississauga, Ont., with their daughter Kennedy, 3. They saved between $11- and $13,000 by listing their home without an agent a little more than a year ago. (Tim Fraser for The Globe and Mail)
Steve and Brianne Buffett outside of their new home in Mississauga, Ont., with their daughter Kennedy, 3. They saved between $11- and $13,000 by listing their home without an agent a little more than a year ago. (Tim Fraser for The Globe and Mail)

How Canada's housing downturn threatens to shake up real estate commissions Add to ...

Not long after starting out, PropertyGuys.com had thousands of customers a year. But in the early days those customers couldn’t get their houses onto the all-important Multiple Listing Service and the industry’s realtor.ca website without paying to use a realtor’s full services. That changed in 2010 as a result of prodding by the Competition Bureau. The Canadian Real Estate Association, which represents realtors from coast to coast and owns MLS and realtor.ca, agreed to change the rules so that brokers could post a listing on those sites for a flat fee.

It was supposed to be a game changer. Sellers could get their listings on the most important website in Canadian real estate for a relatively small amount. Overnight, PropertyGuys.com saw the number of customers it was dealing with rise from between 7,000 and 8,000 a year to about 10,000, Mr. Melanson says. But growth stalled at that level.

“The market is right where the bureau left it, it’s in the same state almost that it was then,” he says with a sigh, calling the failure of technology to upend the industry “the non-existent revolution.”

Fighting against lower fees

One of the highest hurdles new entrants say they have to clear is access to data that are controlled by the realtors’ association. While it’s possible to sell a home through MLS without an agent, it’s still largely impossible for those outside the system to access the vast trove of market intelligence and sales figures assembled by local real estate boards.

That makes competing real estate services and websites less attractive to people selling their homes.

“The Canadian Real Estate Association controls the listings, controls the MLS, nationally, and as a result nobody else has been able to make inroads into the buying-and-selling-property business with online tools and apps,” says Peter Zollman, founding principal of Aimgroup.com, a consultancy based near Orlando, Fla., that publishes a report on real estate websites around the world. “In our view, Canada is still very much an outlier, because there is so little competition among real estate sites.”

The Competition Bureau recently lost, and is now appealing, a case in which it was seeking to make data about the prices that have been paid for homes more accessible online. That case, against the Toronto Real Estate Board, which represents more than 35,000 agents, was seen as a test case for the whole country.

“As a practitioner with an interest in the field, I can say that the…decision bears close scrutiny and it raises important issues about the interplay between the statutory prohibitions in the [Competition] Act and conduct by those few firms in Canada that are truly dominant in their market,” says Melanie Aitken, who stepped down as Competition Bureau commissioner last fall.

PropertyGuys’ Mr. Melanson argues that the dominant players are resisting change with all their might. “There are 100,000 real estate agents in this country that don’t want fees to drop,” he says. “We’re going to have to fight for every inch.”

Stories abound of consumers who have tried to sell their home on their own and thrown in the towel, but there is also a growing number of satisfied do-it-yourselfers.

Deryck Hatheway paid PropertyGuys $798 plus tax for their full-service package to sell his house in Bathurst, N.B., recently, as he sold his optometry practice there to move to Fredericton. He also paid $299 to have his house listed on the MLS, $39 for photos and $20 for an additional ad in the paper.

His house sold in December, two months after he listed it, for $146,000, a bit less than his asking price, and saved thousands of dollars by putting the extra effort in himself.

“We have a zinc mine that’s closing down, so it’s not booming real estate,” Mr. Hatheway says.

“So I found two months to be pretty good for Bathurst. And, having done that, I’d never go through a real estate agent again.”

Anecdotally, it’s believed that about 20 per cent of sellers in Quebec and 10 per cent in the rest of the country don’t use a realtor, says Phil Soper, CEO of Royal LePage and Brookfield Real Estate Services.

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