A for sale sign is displayed outside a home in Toronto. On Jan. 3, the new ‘cooperation policy’ formulated by CREA came into effect, forcing any realtor to add an exclusive listing to the MLS within three days of doing any public marketing.CARLOS OSORIO/Reuters
This year, Canadians will see the effective end of the so-called “exclusive” real estate listing amid a crackdown on the sales tactic by the Canadian Real Estate Association (CREA). But some realtors are asking whether it truly is the end of the exclusive, or just the opening salvo in a bigger fight over organized real estate.
“CREA is being protective for no valid reason,” said real estate lawyer and registered realtor Mark Morris with Legalclosing.ca Professional Corporation. “They are over-stepping their bounds in a significant way. … What we’re doing now is limiting what they [sellers and buyers] can do in the free market.”
At issue is a method of selling a home that has become more common in recent years. These “exclusive” listings, sometimes also called “pocket” or “off-market” listings, are properties put up for sale but not entered on the Multiple Listings Service. Local real estate boards rely on the MLS to share both broker-only information among members and to publish public data on the realtor.ca national website.
On Jan. 3, the new “cooperation policy” formulated by CREA came into effect, forcing any realtor to add an exclusive listing to the MLS within three days of doing any public marketing. Marketing would include everything from a “Coming Soon” sign on a lawn to Instagram posts about a new property.
The vast majority of residential real estate transactions in Canada involve MLS, but there are significant exceptions. Most commercial properties are not listed for sale on MLS, and large chunks of the market for trading in preconstruction contracts for condominium apartments are not found on MLS either. The recent proliferation of websites providing sold-price data, sourced from MLS, has driven more sellers and buyers to attempt to keep their transactions private through the use of exclusive listings.
“Ninety-nine per cent of the time things are happening on MLS, but [exclusives] have always been around,” said Andre Kutyan, broker with Harvey Kalles Real Estate Ltd. The type of client he often sees wanting to go exclusive is a celebrity or business leader, but in recent years he’s seen more agents claiming to do more exclusive deals, too. Verifying those claims can be difficult when there’s no record of a transaction. “There’s a lot of agents who say. ‘Most of my deals are exclusive.’ They try to create the perception they are doing a lot off the books, but there’s no way to tell.”
There are private groups on messenger services on Whatsapp and Signal with hundreds of agents looking to flog or buy an off-market home, and there are even web services that have formed a sort of alternative to the existing MLS to provide a platform for these exclusives.
In 2021, entrepreneur and former realtor Eric Skicki created his own marketplace for non-MLS real estate called BrokerPocket and says he now has 7,000 users of his service (which is not accessible to the general public). Right now, there are about 700 listings on his site, a mix of preconstruction condos and residential real estate listings.
“We’ve become the most successful non-organized real estate platform that doesn’t belong to an association,” said Mr. Skicki. He said the CREA policy, “has significant challenges and should be reconsidered,” and that he hears from his members that many are not happy with the new rule. For now, BrokerPocket will allow users to post exclusive listings if they affirm they are not a members of a board.
Adam Weiner, a salesperson with Harvey Kalles Real Estate Ltd., does a lot of “exclusive” advertising on his social media channels and says that while he’s still able to sell a home off-market the rule will cause him to market it differently.
“I think what I’ll do I’ll mention we have stuff in the pipeline, but I’m not going to be specific, because we aren’t allowed to,” he said.
It’s not clear yet how boards will enforce the new rule.
“Toronto Regional Real Estate Board (TRREB) Members adhere to CREA’s realtor code, and the new cooperation policy is a part of the realtor code,” said Paul Baron, TRREB president, in a statement. “A process is also in place to ensure TRREB member realtors adhere to the related policies, including all forms of public marketing that don’t meet the CREA exceptions.”
Mr. Morris warns that some boards may be draconian in attempting to enforce the new rule, which could further undermine support for organized real estate.
“What is actually going on here is that MLS and the boards have been terrible at addressing people’s actual needs; they’ve not provided for a system that allows for exclusive listings and not provided for a system for assignments,” he said. “Cooperation is a choice and the seller should have that choice.”
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
