Steve Ladurantaye

The country’s original flat-fee real estate agents will have their day in court, years after they claim to have been run out of business by a conspiracy orchestrated by the country’s real estate associations.

Realtysellers launched as an online brokerage in 2001, allowing anyone selling their house to pay a set fee to have it appear on the Multiple Listing System for a few hundred dollars. This was a departure from the traditional sales method, where a seller would hire an agent to handle the entire sales process and then pay several thousands of dollars in commission.

Read the story in the Globe and Mail

In court filings the company argues that the Toronto Real Estate Board and the Canadian Real Estate Association, in a “conspiracy to drive [Realtysellers] out of business and eliminate the competition,” changed their rules in 2007 to prevent Realtysellers from offering its services.

The new rules stated that any agent posting a listing on the MLS – where about 90 per cent of the country’s sales take place – must be involved in the “offer negotiation” process, which meant that the online posting method wasn’t financially feasible any more because Realtysellers could only keep prices down by restricting its services to low-priced listings.

“As a result of the new offer negotiation rules and the ensuing uncertainty over the ongoing ability to operate their new business, [Realtysellers] could not secure any additional long-term financing to keep their new business operating,” Superior Court Justice Kenneth Campbell wrote in his case summary.

In 2007, Realtysellers closed. The failure caught the eye of Competition Commissioner Melanie Aitken, who ended up forcing the industry to allow agents to post flat-fee listings on the MLS without providing any other services to a seller.

Realtysellers founder Lawrence Dale – who has since re-launched the company to take advantage of the new rules negotiated by the industry and Ms. Aitken – filed a claim for $540-million against 49 defendants in 2009, including TREB and the Canadian Real Estate Association. His former partner Stephen Moranis is also a plaintiff.

Anyone who launches a court action can demand any amount of money, so the half-billion dollar claim is largely symbolic.

“TREB and CREA spent two years and hundreds of thousands of dollars trying to make this go away and completely lost,” Mr. Dale said Sunday. “This a significant step toward finally getting them to pay for what they did.”

Both real estate organizations tried to have the lawsuit tossed out of court, but in a ruling late last week the judge ruled it could proceed. The case will likely be heard in September, although TREB said it is considering whether to appeal the judge’s decision.

“TREB is reviewing the decision with counsel to determine whether an appeal is appropriate, and in any event, TREB will continue to vigorously defend the proceeding,” the real estate board said in a statement. “We are confident that when the court ultimately addresses the merits of the plaintiffs’ claim, it will be rejected.”

The Toronto Real Estate Board’s attempts to appease the country’s Competition Bureau have fallen flat, with the bureau filing updated complaints that lambaste the board’s plan to allow agents to set up private websites for their clients.

The board’s proposed policy falls short in two key areas, the Competition Bureau said, and does nothing to address its anti-competitive concerns. Under the new plan, real estate agents would not be allowed to post historical sales data on the websites, or information about commission fees.

Read the story in the Globe and Mail

Historical sales data are a key way for buyers to gauge a home’s value, because they can see how often the property has changed hands and for how much. If consumers could obtain all of the data online and save their agent some work, the Competition Bureau argues, they could expect to pay less in commission fees.

“If the proposed rules are enacted, they will continue to prevent member brokers from operating a [website],” the revised statement of claim states. “TREB will continue to thwart the development of new, innovative, and efficient models of providing real estate brokerage services using the Internet. The proposed rules will discriminate against brokers seeking to innovate, and will constitute a further anti-competitive act by TREB.”

The Toronto board already allows real estate agents to provide a great deal of information to buyers – such as the number of days a house has been on the market and previous selling prices – by hand, telephone or e-mail, but they are not allowed to create websites where customers can look up the information on their own.

The board was quick to react after the Competition Bureau filed its initial complaint, passing a policy that would allow agents to set up the sites as long as certain guidelines were followed – the sites must be password protected, available only to clients, TREB would be able to monitor who is using the site and how, sellers could opt out of having their home appear on the site and the seller’s name and contact information couldn’t appear in the listings.

But without sales data or commission information, the Competition Bureau said the board hasn’t gone far enough. That’s because the bureau wants brokers to be able to use all of the sales data generated by the board to create products that ultimately lower fees for consumers.

Any restriction on the flow of information is unacceptable, Competition Bureau Commissioner Melanie Aitken said. Real estate fees are artificially high in Toronto, she said, because brokers aren’t allowing their clients to do some of the legwork themselves.

Some brokerages in the United States offer their clients as much as 50 per cent off their commission fees if they use a website to do their own research, she said.

The real estate board’s executives have been working on a policy for its 30,000 members since last August, and met with the bureau several times prior to filing the allegations. Former TREB president Bill Johnston has spoken out strongly against Ms. Aitken’s office, accusing her of using her pulpit to advance her career at the expense of the country’s real estate industry.

Friday, the board said it stood by its new policy. If the two sides can’t find a way to break the impasse, the case will go to the Competition Tribunal, which is allowed to issue fines and could issue binding resolutions to force the board to make changes if it felt the complaints were warranted.

TREB president Richard Silver said the board’s main concern is that the bureau wants it to also publish sale prices for homes that have been sold, but haven’t officially closed yet. That could compromise the seller’s ability to get the same price if the deal falls through, he said.

“The Commissioner is pressuring TREB to make changes to its own property listing system that TREB believes would violate consumer privacy laws, reduce the quality of the system, and diminish protection for consumers who list their homes in the Greater Toronto real estate market,” he said.

“TREB appreciates that the Commissioner has a job to do, but TREB is the wrong target. The Commissioner obviously has recognized that her initial application back in May was faulty. Instead of working with TREB to find a practical solution for consumers, the Commissioner has today decided to pursue an additional legal process that will further delay improvements and further disadvantage consumers.”

In a bid to satisfy the Competition Commissioner, the Toronto Real Estate Board has unveiled a new website policy for agents that would give them the power to create personalized listing sites so customers can browse for new homes from their living rooms.

While some of Canada’s 101 real estate boards already allow agents to set up password-protected sites for their customers, the country’s largest board does not.

Read the story in the Globe and Mail

What happens next could set a national precedent for the way home buyers research the biggest purchase of their lives, because other boards are expected to adopt the same policy once it’s instituted.

The Competition Bureau launched a lawsuit against TREB in May, saying it prevents brokers from sharing information online with their customers. It was the latest move in the protracted fight between the bureau and real estate agents, who have come under increasing scrutiny as commission-based payments have grown along with the price of Canadian homes.

The Competition Bureau appears less than thrilled by TREB’s overture, however, saying it would still prefer the real estate association to enter a legally binding consent agreement guaranteeing the sites can operate.

“We continue to believe that a legally binding consent agreement, or Competition Tribunal decision, is necessary to achieve a lasting permanent solution that will prevent TREB from denying consumer choice and the ability of real estate agents to introduce innovative real estate brokerage services though the Internet,” said bureau spokesman Greg Scott.

The Toronto board allows real estate agents to provide information – such as the number of days a house has been on the market and previous selling prices – by hand, telephone or e-mail, they are not allowed to create websites where customers can look up the information on their own.

The new policy – which TREB members have 60 days to comment on – would allow the sites to exist as long as they meet certain requirements. The sites must be password protected; they must be available only to clients; TREB would be able to monitor activity; sellers could opt out of having their home appear on the site; and the seller’s name and contact information must never appear in the listings.

That last rule would keep “for sale by owner” listings off the sites, which could be a concern for the Competition Bureau. The last time the bureau locked horns with the industry, the result was that flat-fee listing companies were able to post ads to the Multiple Listing System on behalf of people selling their own homes. Anything that keeps those listings away from prospective buyers isn’t likely to be acceptable to Competition Commissioner Melanie Aitken.

TREB said it has been working on the proposed new policy since last August. However, the Competition Bureau says TREB hasn’t been willing to go far enough to satisfy the bureau’s concerns. Both sides met several times before the bureau’s complaint was filed.

Incoming TREB president Richard Silver said the policy confirms the board’s “strong belief in open competition and in its members competitive spirit, quite independent of the Competition Commissioner’s claims and approach.”

The bureau said it would rather settle the complaint before an appearance at the Competition Tribunal, which can issue fines and binding rulings.

TREB’s new policy is based on one adopted by the U.S. National Association of Realtors to satisfy the U.S. Department of Justice several years ago.

Toronto home buyers could be browsing websites containing enhanced real estate listings within weeks, as the Toronto Real Estate Board scrambles to avoid a prolonged fight with the federal Competition Commissioner by improving access to data for tens of thousands of real estate agents and their customers.

While some of Canada’s 101 real estate boards already allow agents to set up password-protected sites for their clients, the largest board in the country does not.

Read the story in the Globe and Mail

What TREB decides to do next will set a national precedent for the way in which home buyers research the biggest purchase of their lives, because other boards are expected to adopt the same policy once it’s instituted.

In a bid to head off a protracted battle with the Competition Bureau, TREB is turning to a 2008 deal struck between the U.S. Department of Justice and the National Association of Realtors that opened the data taps for U.S. real estate brokerages and led to the creation of popular house-hunting websites such as Zillow.com and Redfin.com.

“This is a document that the board has used, consulted and adopted in a significant way with necessary amendments while developing its own policy,” said TREB spokesperson Mary Gallagher.

The Toronto board is showing the new policy to stakeholders, and will vote on its implementation June 23.

The U.S. settlement stated that any information an agent could provide in person could be distributed via the Internet, and led to the creation of agent-created websites that give buyers more information about the local market and a home’s history than a simple MLS listing.

The Competition Bureau launched a lawsuit against TREB in May, arguing that it prevents brokers from sharing information with their customers via the Internet. It’s the latest move in the protracted fight between the bureau and real estate agents, who have come under increasing scrutiny as their commission-based payments have grown along with the price of Canadian homes.

While the Toronto board allows real estate agents to provide information – such as the number of days a house has been on the market and previous selling prices – by hand, telephone or e-mail, they are not allowed to create websites where customers can look up the information on their own.

In a strategic review last August, led by TREB president Bill Johnston, the board listed the creation of an online system similar to that in the U.S. as one of its priorities for the next 12 months. But Competition Commissioner Melanie Aitken said she hasn’t seen any signs of progress. Restricting the information agents can put on the Internet stifles competition, she said, and makes agents less productive, ultimately keeping prices higher than they need to be for consumers.

“All I can say is, we met with them several times over the last year and felt it necessary to move ahead this way,” Ms. Aitken said.

Mr. Johnston, who has spoken out harshly against the lawsuit and accused Ms. Aitken of “career building” on the back of the real estate industry, said the Toronto board’s executive will vote on a slightly modified version of the U.S. settlement, tailored to meet Canada’s privacy laws.

The U.S. system allows homeowners to opt out of having their listings appear online, and does not require that listings be made available to the general public. U.S. real estate boards are also allowed to pass on “reasonable costs” to any agent who downloads their data.

While the U.S. settlement led to a proliferation of richly featured websites for the general public to browse, Canadians won’t see a Zillow equivalent any time soon. That’s because the data being pushed out of the Toronto Real Estate Board, or any other, will be available only to home buyers who have an established relationship with a broker.

“We really do think it’s important that there is a relationship established,” said Mr. Johnston. “There are privacy concerns and we need to know who is using the system, but creating it has been a priority.”

Here’s the U.S. settlement…

When you’re hot, you’re hot.

It was the second best May for Toronto real estate sales since the Toronto Real Estate Board began compiling data, according to statistics released Friday.

Sales increased six per cent from May 2010, while prices gained 9 per cent to an average $485,520. The number of listings to hit the market decreased by 15 per cent from last year, meaning more competition through the summer as buyers compete for fewer houses.

Read the story in the Globe and Mail

In a statement, the board said it hoped rising prices would cause more homeowners to list their properties. Houses were on the market an average of 23 days in May.

The real estate board breaks out sales by median prices, with detached homes hitting $505,000. Other categories include semi-detached at $395,000, condo townhouses at $305,00 and condo apartments at $303,000.

The Canadian Real Estate Association compiles data on the 15th of each month, but the country’s 101 real estate boards often release regional data earlier. Vancouver reported Thursday, saying sales were up 7 per cent compared to last May while prices were up 6 per cent.

Sales are showing signs of slowing in Vancouver, however, slipping 8.1 per cent below the 10-year average in May. The market has caused concern because of the high prices – the board said its index price for a detached house was $805,000 in May, up 10 per cent from a year ago.

The index “represents the price of a typical property within a market, taking into consideration what averages and medians do not – items such a lots size, age, number of rooms, etc.”

The board said there have a been a lot of high-price sales this spring, which makes big headline numbers deceptive.

“Of all residential properties sold on the MLS in Greater Vancouver in 2011 to date 21 per cent sold for $1-million or higher and 20 per cent sold for $350,000 or lower,” the board stated. “While 77 per cent of the properties that sold for over $1-million were located in West Vancouver, the Westside of Vancouver or Richmond, the properties that sold for $350,000 or lower were located throughout the entire board area.”