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A policy change by the Canadian Real Estate Association (CREA) will soon require participating brokerages to list almost all residential resale properties on the Multiple Listing Service (MLS), thereby preventing some realtors from marketing properties privately.
Consumers’ interest is often compromised when listings are only circulated in closed circles, thereby denying prospective buyers the opportunity to bid. But it’s easy to imagine circumstances where a seller may prefer to not have a publicly available listing.
An “office exclusive” listing is one that “is not publicly marketed at the written request of the seller.” Instead, realtors may use their private networks to market the property to those “directly affiliated with the listing brokerage/office in a business capacity” as per the “written instructions of the seller.”
The public-marketing approach is the business-as-usual model, where a listing is promoted to the public or realtors “not directly affiliated with the listing brokerage/office in a business capacity.”
But buyers and sellers have distinct preferences that might conflict at times. For example, blind bidding might be preferred by sellers, but not by buyers. How does the new policy serve the unique interests of both buyers and sellers?
Buyers are probably frustrated by those “coming soon to MLS” yard signs for properties that never end up on the MLS. As buyers diligently watch the MLS portals for the property, the for-sale sign is unceremoniously removed, leaving them guessing about whether the dwelling was sold or removed from consideration.
Exclusive marketing is also unlikely to be in the interest of sellers. As an exchange, MLS affords the biggest exposure for any listing. Once available on MLS, buyers from across Canada, or even around the world, can find the listing, compare it against other offerings and decide whether to probe further. Economics 101 suggests that the higher the exposure, the greater the competition, which is likely to result in a quicker sale at a desirable price.
