The Canadian Competition Bureau (Canada’s version of the FTC and DOJ) is considering whether some of the Canadian Real Estate Association (CREA) rules and regulations might be anti-competitive. Attorneys for the Competition Bureau have interviewed Bloomkey’s broker, Lawrence Bunnell, on a number of occasions to determine why lower cost alternative brokerage services haven’t spread across Canada the way they have in the United States. As the creator of the online limited service, flat-fee real estate model, Mr. Bunnell’s thoughts on competition within the industry have given the Competition Bureau insights as to the methods that traditional brokers use to thwart competition within the industry and limit the rights of property owners to choose the types and costs of real estate brokerage services.
For example, CREA rules prohibit home sellers from purchasing just a listing in the Multiple Listing Service from a real estate broker. If a seller in Canada wants to list their property in the Multiple Listing Service they must also purchase a bundle of services including negotiation and contract assistance. This, of course, affects the price that sellers must pay for real estate brokerage services.
The rules have been fairly effective at limiting new models and reducing fees over much of Canada. Most provinces don’t have online flat fee models and Canadian real estate sellers are forced to pay traditional real estate fees for access to the market in most areas. The few flat-fee brokers in Canada complain that they’re business models are being singled out by these rules as they are forced to provide services to consumers that they neither want nor need.
