Skip to main content
The Globe and Mail
Support Quality Journalism
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); }

A detached home for sale at 97 Redwood Avenue in Toronto on Tuesday, April 7, 2015.

Darren Calabrese/The Globe and Mail

The gossip among real estate agents across Canada this weekend is likely to be all about the fallout from the Competition Tribunal's move to undo the industry's virtual monopoly over key home sales data.

Out of earshot of their clients, that is.

The fear among brokers is that liberating this information will lead to the inevitable Uberization of the residential real estate business, and all that entails.

Story continues below advertisement

Gone will be the days of high fixed commissions and concentration of deals in the hands of relatively few larger brokers. And the door will be thrown wide open to online discount brokers and do-it-yourself house sellers.

Or not.

On Thursday, a tribunal sided with competition watchdog John Pecman in a long legal feud with the Toronto Real Estate Board (TREB) over access to the industry's Multiple Listing Service (MLS).

Full details of the decision aren't out yet, but it's expected the decision will force TREB to give online brokers access to key pieces of information, such as past and current sales prices of houses, the length of time properties have been on the market and real-time price changes.

The decision directly affects the Toronto real estate market. But because MLS is owned by the Canadian Real Estate Association – the national organization of brokers – it's likely to set a precedent for the rest of the country.

Industry fears may be overblown. It's been eight years since realtors in the United States settled a similar antitrust case, forcing them to share their sales data with Internet brokers.

At the time, the government argued that breaking up the closed MLS system would reduce transaction costs and drive down commissions, of typically 5 per cent to 6 per cent.

Story continues below advertisement

The experience since has been mixed. Yes, the settlement has democratized the data and allowed online database intermediaries, such as Zillow, to thrive.

But it turns out that most Americans still want the hand-holding experience of a real, in-the-flesh broker when they buy or sell a property.

One consequence of this devotion is that commissions have held up surprisingly well. On average, they've actually firmed up slightly since 2008.

The U.S. settlement put more power in the hands of buyers and sellers. And better knowledge on both sides of transactions invariably fosters more efficient markets.

But there is no evidence that it's undermined the real estate broker model, as the Internet has done to travel, taxis, books and parts of financial services. Inefficient intermediaries are being squeezed out all over the place.

So it suggests that perhaps there's something fundamentally different about buying and selling a house.

Story continues below advertisement

For one thing, most people buy (or sell) a house just a handful of times in a lifetime. And it's often the most valuable chunk of their accumulated wealth. So it's not a transaction that you want to mess up, with bad advice or none at all.

Move to a new city, and a good real estate agent can be your best friend, providing advice on everything from schools and shopping, to electricians and lawyers.

Knowledge is even more important on the selling end. There is a strong incentive for sellers to find the hottest agents, encouraging greater industry concentration.

Another reason that commissions have held up so well in the United States is that too many sellers are reluctant, and perhaps afraid, to negotiate. Brokers may be more willing to accept discounted commissions than you might imagine, particularly in a down market.

The way commissions are shared between the buying and selling agents may also inhibit competition. Agents have a greater incentive to show their clients houses where the seller's agent is offering a heftier commission. And they are probably less likely to steer buyers to houses being sold by homeowners without an agent.

At the end of the day, the significance of the Competition Tribunal ruling is that it gives buyers and sellers more information, and in theory, more power.

Story continues below advertisement

Discount brokers currently have a relatively small share of the market in most Canadian cities – perhaps 5 per cent. Giving these companies access to more MLS data should allow them to make inroads.

The U.S. experience suggests that disruptive change may still be years away in the real estate business.

If you want it to happen faster, haggle with your agent the next time you sell your house.

Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies