Toronto Real Estate Dreams

It is a little known fact but the MLS (Multiple Listing Service) was created in the late 1800s. It is a bilateral agreement between the NAR (National Association of Realtors) and the CREA (Canadian Real Estate Association) whereas one broker can distribute a list of properties to all other parties involved with either the CREA or NAR. Under this agreement, other brokers promote these properties and give it some publicity in exchange for a commission fee. However, in recent years, a rift has appeared between the CREA and NAR largely caused by advances in marketing tools. The effectiveness of the MLS system is being debated as many believe it is not answering the needs of the real estate market.

With the wide spread of the internet, homes can now be easily be found online. One of the most important strengths of the MLS was the exposure it offered properties but nowadays, prospective buyers can search the internet for properties at little or no cost. This shift in shopping patterns has caused the board of directors of both the NAR and CREA to hold numerous meetings to discuss how the MLS can be improved and prevent from becoming extinct. We should not forget that the MLS still remains the most efficient tool for matching sellers with buyers. Trading real estate on your own can also be very challenging as there are numerous legalities as well as negotiations that surround a real estate transaction. However, it is true that with the incredible amount of real estate information available online, buyers and sellers alike are much more educated than they were twenty years ago.

It appears that the CREA and NAR both agree that the MLS should be deregulated and opened up to other parties. Currently, the MLS is region specific whereas an agent from the Greater Toronto Area can only access listings for this particular region. This may change in the future as pressure is being applied to create more competition, and a more a la carte approach to real estate trading. Smaller fees may have to be accepted by members of the MLS if they want to stay in business. But to say that the MLS is obsolete is not true.

One of the main sticking point with the MLS system is that extra fees are being billed to sellers by its members and often, these said services are not directly related to the MLS listing. When this came to light, there was a public outcry. How could the CREA and NAR demand more than is needed to place a listing on the MLS system? With so much pressure from the public, the CREA has no choice to to make changes. One of the options that is being discussed it to offer consumers more choice whereas the real estate agent would list all the services that are proposed and the cost for each and the client would then choose what they feel is appropriate for their needs. But as with any organizations, changes take time and we may have to wait a few years before the proposed modifications take place.

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