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Hi Everyone:
I just saw the Global National news-piece about the Multiple Listing Service®, or MLS®. I feel that I need to comment on this news report. I should point out that as a sales-rep with Re/Max, I am only a very minor cog in this industry-wheel, and certainly NOT privy to the ongoing negotiations between the federal government and our industry association. So it is not for me to comment on THAT issue, but merely to comment on the news report and the false impression it has left. Now, as a former police officer, I should be used to the fact that news-reports are incomplete at best, and outright misleading at other times. And so it was with this report which probably will have left many people with the impression that private sales are going to be posted on the MLS®. Lets take a look at why this is NOT an option. First lets see what the news report GOT RIGHT!
“90% of Homes are sold on the MLS®”
BINGO! While I have to assume that the news reporter checked their facts, I’ll accept this statement as correct. And at 90%, that would make the MLS® a super-efficient tool in anyone’s books. I’ve written in the past about the fact that Canada’s MLS® is unique in the world, and by all reports, the most effective system in the world. But what makes it so powerful?
Co-Operation and Commission-Sharing:
Here you have it. THIS is what makes our MLS® so effective. The minute a home-owner lists his home, with a REALTOR® on the MLS®, all real estate agents in that market area will have access to it, can show it and can be assured that they will get paid when they sell the home. This last portion has to be an important part of the equation: because unlike most other employed people, real estate agents DON’T get a regular paycheck. I know that the word “commission” has almost become a dirty word, but the fact that “Products are SOLD by SALESPEOPLE” has never been disputed.
Back to the News Report, where a Private Seller in Toronto was attempting to ‘save some money’ and sell his $500,000 home on his own. He was posting it onto a private sales website, probably putting out flyers and posting it onto other sites, such as Kijiji and Craigslist. He was dreaming of the day that he could put his home on the MLS® WITHOUT paying commission.
Talk about “having your cake and eating it too”.
If that WERE going to happen, it would be like removing the main reason for the MLS® success (commission-sharing), and still expecting it to perform the same. Kinda like taking the engine out of a Formula One race car and still expecting to win the race.
What the news report failed to point out is that the MLS® is owned, operated and paid for by REALTORS®. It is not a public service, government funded or advertisement funded site such as the ones mentioned above. Suggesting that the public has free access to it would be like suggesting that private car sellers have a RIGHT to place their vehicles on a Dealer Lot, and then making the car dealer responsible for the sale….without paying the dealer for his time and effort.
Back to the private seller in Toronto who was complaining that he was not getting a lot of ‘bites’ on his home.
HELLOOOO!!! “90% of homes are sold on the MLS®!!!”
If you’re going to post your home in a place where only 10% of people shop, don’t expect the same activity or price as if you listed on the MLS®. Not too many buyers in the $500,000 range will be looking on their own. (Would YOU buy stocks and bonds off some private internet site WITHOUT getting professional advice? Some people might…. most won’t.)
You don’t put a quarter into a gumball machine and expect to woo your special lady with THAT ring!
You don’t take the wheels off a race car and expect to win!
You don’t sell your house via a poster on a telephone pole and expect to get top dollar!
In the end, private sellers DO HAVE A CHOICE and have always HAD A CHOICE.
Kijiji, Craigslist and Private Seller sites give them access to 10% of the market.
The MLS® gives you access to the ENTIRE MARKET.
To dream of getting the benefits of the latter at the cost of the former is unrealistic. Much like anything in life, you get what you pay for!
If you are thinking of selling your home (house OR condo), I invite you to contact me. I will sit down with you and discuss your options. If you want, I won’t even bring a listing contract with me…. just give you the information and let you ‘sleep on it’. Call me anytime. Bo 333-2202
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It seems that everyone has opinions about this topic. You certainly do, and paint all agents with the same brush. But here is an analogy: Imagine “Private Car Sellers” started whining about the fact that professional car dealerships have these big fancy lots, and its not fair that the private car sellers have to sell their product out of their own driveways. So then imagine that ‘the courts’ mandate that all car dealers must now make room on their lots to allow private sellers to peddle their wares without compensation. The MLS, which some people would want to advertise their homes on for free, was created by agents at their cost….. its not a government handout, charity, tax-funded free-bee or anything of the sort. To demand free access to something that has been created at someone else’s expense and time shouldnt sit right with anyone except freeloaders.
Wow : you certainly don’t hide from the fact that the commissions are so closely tied to MLS listings and not based on the work of the agent. What if private sales were allowed on MLS due to legislation to remove the oligopoly that exists so that sellers of homes don’t have to pay extraordinary commission costs for little or no work by the agents.
Based on the recent decision to eliminate this restriction, I think that the days of overpaid agents will be coming to an end.
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