A skirmish between the country’s competition commissioner and Canada’s largest real estate board has been escalated by the Competition Tribunal, which has decided that a local fight over private websites will actually affect real estate agents across the country who use the Internet to help consumers find homes.
The fight is about how consumers access Multiple Listing Service data about homes they are interested in buying. The Toronto Real Estate board wants to restrict what is provided on password protected websites called VOWs, but Competition Commissioner Melanie Aitken argues that suppresses competition and forces consumers to be overly dependent on real estate agents for information.
She argues that if consumers are able to access basic data online about selling prices and commission rates, they will be able to do more of their own legwork and hire agents who are willing to charge less for providing fewer services than traditional brokers. Any decision that makes data flow more freely could result in alternative services being offered by the country’s agents, she said.
The case appears destined for a hearing at the Competition Tribunal, which has the power to impose a ruling or drop the case.
The Canadian Real Estate Association asked to speak at the hearing, and in a decision obtained by the Globe and Mail the Competition Tribunal ruled the national real estate association was correct to assume any changes forced upon the Toronto board would set a precedent for the rest of the country’s 100,000 real estate agents.
“CREA does bring a unique perspective to this topic as it relates to other Internet data-sharing vehicles and because an order made by the tribunal may impact the rules it can impose on its members for their use CREA is directly affected,” the ruling states. “The Tribunal’s ruling is likely to have precedential impact on the rules CREA may establish.”
The country is divided into more than 100 real estate boards, with CREA as the national body. Each board can set its own rules about the data it makes available, which means consumers in some markets have easier access to information than others.
Some of the boards have no problem providing the data the Toronto board is withholding, but there is no national standard. The information is essential for any home buyer, because it tells a deeper story about the local market and the home's history than a simple listing.
Ms. Aitken filed charges against the Toronto Real Estate Board earlier this year, saying that the board makes it difficult for its member agents to show data about properties to their clients via a secured website. Such sites would see consumers browse homes on their own, and then call an agent when they found something they liked.
The Toronto board allows real estate agents to provide a great deal of information to buyers - such as the number of days a house has been on the market and previous selling prices - by hand, telephone or e-mail, but until August they were not allowed to create websites where customers could look up the information on their own.
The board amended its policy in August to allow for the sites, provided a consumer is working with an agent, but Ms. Aitken said it didn’t go far enough because it would withhold data such as pending sales and commission arrangements from consumers.
The hearing will also hear from Realtysellers, a Toronto brokerage which asked for intervener status. It currently operates as an online sales brokerage, but argues that if more data was provided online it could expand its services to help those looking to buy a house as well.
The brokerage wanted the tribunal to expand its scope to consider what services may be offered online in the future, but was restricted to speaking about how its business could be affected by the changes.
Instead, it will only be allowed to speak about “the cost savings and operational efficiencies of operating a virtual office and the savings that can be passed along to consumers.”