Posts Tagged ‘canadian real estate association’

It’s easy to snipe from the outside. But having watched and read coverage of yesterday’s announcement of new rules around the Multiple Listing Service (MLS) system by the Canadian Real Estate Association(CREA), I can’t imagine this is the way they would have wanted it to work out.

Some quick background:

In Canada, the MLS system is operated by CREA, and until yesterday, nobody but a realtor could put a listing on that system. This upset people who wanted to sell their house on their own, or who wanted to use services such as Grapevine or Property Guys. The proprietary nature of MLS data also led to disputes between CREA and people who wanted to mash up MLS data with Google Maps. One example of a failed mashup venture was housing123.com, which was shut down last year.

The federal Competition Bureau has been involved in a longrunning dispute with the association, arguing that the MLS system as presently constituted wasn’t open enough to  competition. In February, the Competition Bureau moved against CREA, saying

For example, under CREA’s rules, agents are prohibited from offering consumers the option of simply paying a fee for an agent to list a home on the MLS system. Instead, all consumers looking to list a property on MLS must purchase a pre-determined set of additional services from a real estate agent, such as the presentation of offers and negotiation of a final deal.

“The Bureau is focused on striking down these anti-competitive rules, so that real estate agents wishing to offer innovative services can do so, and consumers can benefit from greater choice,” said Commissioner Aitken. “While the market will ultimately determine prices for residential real estate services, we expect that if the Tribunal strikes down the anti-competitive restrictions, there will be downward pressure on real estate fees in Canada.”

CREA strenuously objected to that characterization. Here’s what CREA President Dale Ripplinger told the Globe and Mail at that time:

CREA president Dale Ripplinger said the decision was “surprising and disappointing.”

“We do not agree with the Bureau’s position that certain CREA rules are anti-competitive, either as a matter of fact or as a matter of law. CREA’s rules allow for innovative business models and provide a broad range of choice for consumers,” Mr. Ripplinger said in a statement.

Which brings us to yesterday, when CREA announced a number of changes to their services and held a news conference. Normally, I would have added “a news conference to explain the changes” to that sentence. But I didn’t for a specific reason — they didn’t want to explain, as this CBC News report will make clear:

The next blow came when the Competition Bureau dismissed the changes in no uncertain terms, saying in this statement:

“There is nothing in these proposals that we haven’t seen before and they do not solve the problem,” said Melanie Aitken, Commissisoner of Competition, “They are a step in the wrong direction. These amendments amount to a blank cheque allowing CREA and its members to create rules that could have even greater anti-competitive consequences.”

In February, the Competition Bureau filed a challenge to CREA‘s rules regarding the use of the MLS. The Bureau has concluded that these rules restrict the ability of consumers to choose the real estate services they want, forcing them to pay for services they do not need. The rules also prevent real estate agents from offering more innovative service and pricing options to consumers.

“We have repeatedly advised CREA‘s leadership that these amendments do not solve our ongoing competition concerns and I reiterated this directly to CREA as recently as last week in a letter to the President,” the Commissioner said.

So you hvae a news conference where the President flees from the media without answering a single question, then your “enemy”, rather than acknowledging things as a step forward, says it’s a step in the wrong direction. This didn’t go well.

So what went wrong? From the outside, my guesses would be that there was some combination of:

• insufficient thinking through the news conference. If you weren’t going to talk to media, why invite them at all? Send out a statement.
• a lack of consultation of the Competition Bureau. If this was going to poke the hornet’s nest, why do it?
• an overall lack of attention to communications. The CREA web site has far from a state-of-the-art media room. It needs some serious upgrading. Furthermore, there’s a wordpress-based CREA News blog, but that site has nothing about the new rules CREA’s proposing. Last year, when I wrote a couple of blog posts about the lack of mobile functionality on real estate sites, I didn’t find CREA tremendously responsive.

There’s no doubt that CREA is facing a difficult issue. But communications could have a positive effect on the issue. Right now, I don’t think that’s happening.

Photo is licenced by Creative Commons: CC BY-NC 2.0; post inspired by Sarah Stewart