The national organization representing realtors across Canada is introducing a new policy that aims to increase integrity, transparency and comprehensiveness of real estate listings to improve home buying and selling in the country.
Recently, the Canadian Real Estate Association adopted what it calls the Duty of Cooperation for the REALTOR® Code which is accompanied by a REALTOR® Cooperation Policy.
CREA, which represents more than 160,000 realtors working through 75 real estate boards and associations, says the core element of the new policy requires that residential listings be placed on an MLS system within three days of public marketing of a property. Public marketing is any type of marketing of a listing to the public or to anyone not directly affiliated with the brokers and licensees of that brokerage.
“We engaged in many discussions and consultations with membership to help us land on this REALTOR® Cooperation Policy as a solution to growing concerns amongst consumers in the market,” says Jill Oudil, Immediate Past Chair of CREA. “Cooperation is central to what we do as realtors and protecting and enhancing the comprehensiveness of MLS systems is in the best interest of the market.
“The REALTOR® Cooperation Policy ensures realtors have access to the most comprehensive property data for their clients, and at the same time it maximizes selling opportunities for home sellers. This exciting addition to our REALTOR® Code not only benefits realtors, it’s in the best interest of Canadian home buyers and sellers.”
The new policy is also intended to support and enhance the MLS system in the country.
“Over the last few years, the Canadian Real Estate Association (CREA) heard how consumers were becoming increasingly frustrated by the rising misuse of marketing tactics that were keeping listings off MLS® Systems, limiting the exposure of available properties to REALTORS® and their buyer and seller clients,” says CREA.
“The revised policy also includes enhanced disclosure and consent requirements between REALTORS® and their seller clients. REALTORS® will have to disclose to the seller the benefits of listing the seller’s property on an MLS® System, including greater exposure of the property to more potential buyers, which may result in more offers and increase the likelihood of receiving the best offer in terms of price or other terms and conditions of sale.
“The policy also recognizes there are many different types of buyers and sellers, and that not every seller wants their property to be advertised. Under this new requirement, exclusives are permitted as an option for an exclusive marketing approach for sellers with privacy concerns who do not want broad exposure of their property to the public. Any seller who then declines to use an MLS® System to market their property would have to provide confirmation they understand the disadvantages of not using an MLS® System and confirm in writing their decision not to market the property publicly.”
CREA says the new policy, which will come into effect on January 3, 2024, is focused on the purchase and sale of residential properties, which form the bulk of real estate transactions on MLS systems.
“This timeline will provide real estate boards and associations time to review their current rules and ensure they are compliant with the policy,” it says.
Paul Feuer, with CREA’s Legal department, said the new Article 30 of the REALTOR® Code (Duty of Cooperation) creates an ethical obligation for realtors to cooperate using MLS systems. He said realtors already have an ethical and legal obligation to act in the best interests of their client and the new Article 30, together with CREA’s REALTOR® Cooperation Policy reinforces the benefits of using MLS systems for both realtors and their clients.
“The policy ensures that local MLS systems have the greatest number of properties in it, allowing realtors to have more comprehensive information for more precise Comparative Market Analyses when setting a list price, or advising on an offer price. Realtors can still market to other realtors in their own office and their clients, or by one-to-one direct marketing to realtors outside their own office without triggering the policy,” he said.
“This new Article 30 and the policy address common complaints about the use of certain narrow or limited marketing practices. For example, ‘Coming Soon’ to your MLS system-type marketing can be misused to hype an early sale, particularly in a hot market, without a real intention for the property to appear on the MLS system. This amounts to a broken promise to consumers who may not get the opportunity to bid on that property. Another example would be marketing through social media to only a small group of realtors.
“Having properties available for cooperation with other realtors on MLS systems ensures maximum visibility for a listed property: through their realtors, sellers get access to a broader pool of potential buyers which can result in more offers and better offers, and buyers can access the most comprehensive inventory of homes which may meet their needs.”
Romana King, author of House Poor No More and winner of the Excellence in Financial Journalism 2022 Book Award, said that over the last decade the Canadian real estate industry — and the realtors that are the face of the industry — went through quite a bit of public shaming.
“Lax rules, dated legislation, a lack of reporting and poor oversight meant that a few acted in a manner that hurt the majority. It’s that old cliche, a few bad apples spoiled the basket. As a result, the real estate industry started to tighten the loopholes, crack down on conduct and, in cooperation with governmental and educational institutions, implement legal requirements for best-practices conduct. This recent legislation is one more step along this path,” she said.
“Some have criticized CREA for establishing ethical conduct as a legal requirement. Unfortunately, we know from past practices and conduct that without legal requirements — and enforceable and meaningful consequences — the cost of circumventing rules simply gets added to the cost of doing business. “
In this respect, the new legislation is critical for CREA and its members in a number of ways, she said:
- Continues to establish CREA as a member-based association capable of policing and reprimanding its members (and this helps secure their place at an important ‘table’ populated by Canadian policymakers);
- Establishes a clear and transparent policy regarding the use of Exclusive or “Pocket” listings — and this helps to reinforce an industry trying to overcome issues caused by a lack of transparency and oversight;
- Sellers and buyers are protected by this new legislation — not realtors. This is key, as the industry is trying to prove that clients come first, not the bankroll of realtors. This legislation allows sellers with concerns regarding privacy to work with a realtor to continue using exclusive listing status. The property for sale would show up in MLS but be protected from being viewed by non-members (ie: not a Realtor). A seller’s privacy is maintained, and buyers now have greater access to all listings on the market without being forced to work with only a handful of agents who dominate communities or neighbourhoods (in this way, eliminating the Realtor-advantage of using Pocket listings);
- Helps the Canadian real estate industry, as the data is more complete and more robust — and this data is used to help establish and reinforce domestic and international assessments of the Canadian real estate marketplace — and helps inform and influence Canadian legislation and policies.
(Mario Toneguzzi is a veteran of the media industry for more than 40 years and named in 2021 a Top Ten Business Journalist in the world and only Canadian)