Many sellers in the Toronto-area real estate market are choosing to forgo the attention that a sign on the lawn and a social media campaign brings. They are finding more discreet ways to trade properties.
The “exclusive” or “off-market” listing gained traction during the pandemic when people wanted to limit the number of visitors inside their residence. Agents say they are also seeing an increase during the market decline this year as sellers quietly test the market without letting their property become over-exposed.
Against that backdrop, many agents were astonished last week when the Canadian Real Estate Association included an item in their newsletter announcing an edict that seeks to limit the practice.
The policy is a fascinating new twist and turn in a market that has already seen a tumultuous few weeks, says real estate agent Gillian Oxley of Oxley Real Estate.
The Realtor Cooperation Policy declares that, within three days of public marketing, agents must place the listing on their local board’s Multiple Listing Service system. CREA oversees the realtor.ca site that displays properties from the MLS of real estate boards across the country.
“This morning I saw a listing that was $20-million on exclusive,” Ms. Oxley says. “There’s not everyone that wants that on MLS.”
CREA’s missive generated tremendous buzz among the agents who quietly share their exclusive listings in Facebook groups and tight networks, she adds.
Kevin Crigger, president of the Toronto Regional Real Estate Board, says he has received a number of calls from member agents.
He also first learned of the change when the CREA missive landed. It was released in advance of a conference hosted by CREA in Ottawa for boards from across the country.
“It’s far from a final policy,” he says. “There was obviously robust discussion while we were in Ottawa.”
While the newsletter item made no mention of seeking input before the policy is slated to come into effect on Jan. 1, Mr. Crigger believes there will be an opportunity to tweak the details.
The announcement put the topic at the top of the agenda for every agent who deals in this sphere of the market, Ms. Oxley says. One big question is how sellers will respond to having more limited options.
“How you want to sell your home should be a choice and a decision that lies fully with the homeowner,” says Ms. Oxley, who has three off-market listings in her folder at the moment. “I’m hand-picking agents that I specifically know have clients that want something I’m able to offer them.”
Public marketing, according to the policy, refers to any representation of the sale of a property, including yard signs, e-mail blasts, flyers and social media posts, among other means of communication.
Agents will be allowed to trade information on exclusive listings within their own office – but only after the client confirms in writing that the listing agent has informed the seller of the benefits of having their listing publicly marketed and posted on the MLS, and the seller specifically instructs the listing agent not to do so.
Mr. Crigger says the “coming soon” lawn sign that many agents use is frustrating for buyers because there’s nothing in the rules to define “soon”. Potential buyers often see a “sold” sticker on the sign the next time they drive by.
But Mr. Crigger is concerned that the proposed policy intends to limit agent’s ability to communicate with other agents outside of their own brokerage.
“That is an area where we certainly wouldn’t agree,” Mr. Crigger says of TRREB’s position.
As an agent, Mr. Crigger has represented clients on an exclusive basis. He says there are a number of circumstances in which a seller might crave privacy: the homeowner may be a celebrity, for example, or an executive of a public company might be concerned about raising questions among shareholders.
But he agrees with CREA’s goal of reinforcing the collaboration between realtors and giving buyers access to a “robust offering of properties”.
CREA’s rationale, the document states, is that the policy will increase the level of professionalism of realtors, better serve consumers and strengthen the MLS brand.
Buyers have greater access to inventory and sellers have the increased exposure that may lead to competing offers, says CREA.
At one time, so-called pocket listings tended to be quietly traded among top agents with a big book of business, says Ms. Oxley.
Over time, the practice that began with handshake agreements became formalized with written contracts. Carriage trade agents would often display exclusive listings on their own web site but not the public MLS.
Tommy Lioutas, broker with Re/Max Hallmark Realty Ltd., says private sales have become more common in all price ranges in this fall’s precarious market.
Some homeowners, he says, prefer to forgo decluttering and staging for professional photos. He recently sold a three-bedroom bungalow in Pickering, Ont., without public marketing because the owners didn’t want to go through onerous preparations.
“They have a child so there’s lots of clutter and every wall needed to be painted,” he says. “It’s really hard to keep a house in show-ready condition.”
He put out the word through his network and sold the house to the first couple who looked at it for the full asking price of $950,000.
Undoubtedly, Mr. Lioutas says, he would have set an offer date in anticipation of multiple offers during the market mania of 2021 and early 2022. But in the current environment, there is the chance a listing will languish.
Buyers are relieved to have the opportunity to buy without competition, he adds.
“They love the idea that they’re able to see something before the general public.”
The buyers of the Pickering house had lost out on about a dozen bidding wars in the past, he says.
Mr. Lioutas was also surprised by CREA’s proposed policy.
“I will have clients who will be disappointed with the changes. I would have thought there would have been an opt-out.”
Mr. Lioutas muses that enforcement will likely depend on neighbours reporting on each other if they see a “coming soon” sign lingering on a lawn.
He notes that even under the proposed rule change, agents will be able to market a property within their own brokerage.
“There are still ways to do it if your client is dead-set on going exclusive.”
Robin Pope, broker with Pope Real Estate, says there is some cachet in buying a property off-market, but he believes the practice is useful in limited circumstances among tight circles of agents.
“Not all of the properties by any means are sold by those people – that’s why we have MLS.”
A buyer from Asia, for example, may choose to work with an agent from Markham or Richmond Hill, where there are large Asian communities. That agent may not be well-connected with those who typically trade houses in Yorkville or Forest Hill.
Mr. Pope points to the example of a townhouse on Roxton Road near College Street that sat all summer with an “exclusive” tag on the sign out front. The only way a prospective buyer would see it, he says, is if they happened to be driving by.
“I do agree with their position that having a property on the open market is in the best interests of the property owner.”
Still, Mr. Pope does have reservations about the industry restricting the client’s options.
“I also support the idea that a seller should not be dictated to in how they sell their place.”
Agents also wonder why the associations that represent the industry have not been more transparent.
“How could you implement or create a policy without a vote or the opportunity to make a case for why it is such an important tool in our toolbox?” Ms. Oxley asks. “I think there will be a lot of pushback.”
Mr. Pope also questions how the policy will be enforced after it comes into effect.
“How else are they going to have this new procedure implemented – especially if no one knows about it,” he quips.