“How do you argue against someone who’s not willing to seriously inspect their beliefs alongside either their, or others’, empirical evidence?”

I think its an important question, and one that a lot of us should ask more often. I don’t ask myself enough. He was asking this in reference to George Monbiot and AGW, but it occurred to me that I run into that problem(at least I think I do) with the MLS and the Competition Bureau and commissions and whatnot.

Here’s one way that occurred to me. Don’t argue against the people who won’t inspect their beliefs. Instead, argue in front of others who will, and use the ones who won’t as a foil.

Here’s another way: use arguments that other people make, especially people who don’t have a vested interest in your position. I’m going to try both.

For an example of the latter, Purp wrote:

“REBGV stats tell me that there were 53,000 new listings in Vancouver in 2009. Based on commission fees, how can this thing not be making bucket loads of money? Even if the ‘cost’ of each listing was only $100, then we’re talking about $5.3 million in revenue annually, this is significantly more than the total operating expenses of the BCREA.

So to cover board expenses we’re talking maybe $50 / listing, and you want to make some profit and cover your time, so how about $150 to list our place? (hypothetically speaking at this point) Then let’s pull out the ’schedule A’, as I heard you refer to it before, and let’s negotiate some agency costs.”

He was actually within about 2 million in his estimate of REBGV listing revenue (its in the $7 million range) and that’s pretty damn good for a guy doing the math in his head. He was confused on the REBGV’s relation to BCREA (the REBGV doesn’t pay BCREA’s operating expenses, it pays the REBGV’s operating expenses), but aside from that his math is a great jumping off point.

I responded by saying:

”BTW, let’s take a quick look at your numbers. $50 cost to list the property with the Board, and $100 for my time. For me to make pay my receptionist I need to do what, 25 listings per month? Pay the rent and I’ve got another 10, say. Hydro, licences, internet, insurance and whatnot and I need at least another 5. I haven’t even started paying myself, or my taxes, and I already need 40 listings a month.

We listed 3900 properties last month across the board. We’ve got 9000+ agents. That’s .43 listings per month per agent. I either need 93 agents working for me, with each of them bringing me the average listing count for free, or I need to do on my own what 93 agents average at now, or you need to pay me more than $100 for my time, or I need to go online, stop paying rent, fire my receptionist, and thereby drop my costs substantially.

I’m not saying its impossible. It just will require a radically different level of service or price. As I said, 40 listings per month at $100/each and I haven’t covered all my current expenses yet – I’m still working for free. Is anyone surprised that E-Realty folded its tent? How could they possibly have survived? ”

Purp came back with an astute observation:

“But of course the listing fees don’t need to cover all the overhead of your office, since you are also providing other services from that office which share the costs. So what do you think a fair price is for just getting a property listed on MLS to cover costs and provide a nice margin? ”

And he’s absolutely right about that. I have other services that I can offer that will generate more profit for me. I don’t need listing fees to pay for everything, so I have some freedom to operate.

Of course, there is an obvious take away that perhaps isn’t so obvious. While I may have other income sources to help me make my monthly expenses, what about a guy who does nothing other than offer MLS access, and no other agency services? What does that poor sucker do?

Let’s remember that we don’t even need to address the Board’s cost of providing their side of the MLS service. We can assume that the Board can provide the service to Poor Sucker MLS Service for the $50 Purp suggested. Let’s just look at the revenue the guy needs to generate and what that requires. Purp is willing to give him $100 per listing. To make office rent ($1000) receptionist ($2300) phones, computers, internet, licenses, insurance, postage, tech help, advertising, bank charges, book-keeper ($3000) – the poor sucker’s at $6300 already and he hasn’t generated any money for himself. He still needs to pay cel phone, gas, a Starbucks bill, plus food, rent and clothing ($3000, and he’s not exactly living like Bob Rennie).

That’s a grand total of $9300 per month to keep the doors open. At $100 per listing Poor Sucker MLS Service needs to list 93 listings every month. The REBGV average was .43 listings per agent in February. Poor Sucker has to do 216 times better than the REBGV average to stay in a marginal business, because, remember, unlike me he’s only concentrating on providing sellers access to the MLS at a price they consider fair.

Nothing on the REBGV’s side or CREA’s side stops him from doing this, except that we require that he ensure that the data he submits is accurate, and that he offers something other than $0 as a cooperating commission.

On the other hand, charging a $100 markup for his time still makes it tough. He either lists 93 properties each month or charges more or cuts his costs.

How could he do that? Clearly, he could get rid of the receptionist. And the office. He could work from home. He could cut every regular cost and just keep his own personal costs – food, rent, clothing, licences, internet, advertising, insurance, etc. Let’s say he cuts costs to $6000. That’s still 60 listings per month, and he has to meet clients at home or at Starbucks.

He could do it another way. He could organize the model, outsource the work to India and pay someone $10 per listing to handle the paperwork, free up his time and get another job (maybe as a Starbucks barista, since that would allow him to be close to his office). He no longer has to do 60 listings per month. He needs one computer, can probably do that off his phone, and he’s making $90 per listing. If he does .43 per month, the board average, he’s still ahead of the game, assuming he doesn’t have to pay for licenses, book-keeping, insurance, etc, but he’s no longer actually in business. He supports himself by making lattes.

In short, its a tough way to make a buck, no matter how you slice it.

There’s another way to price the listing service, though. He could say, as I do, “It costs me $x to keep the doors open all month. If I do 1 deal I need to charge $x. If I do 10 deals I can charge $x/10. Those are my real costs, even if I can’t nail them down ahead of time.”

It still tough to make a buck. Can you imagine my online listing webpage explaining that your listing fee will be determined after I’ve collected all my bills for the month? Its not an attractive sales pitch.

As I said before, other guys have tried low cost listing services. They just aren’t profitable. As a man once told me “A small businessman provides his services at the lowest possible cost. A big businessman provides them at the highest possible cost”. Small businessmen have tried to provide MLS access at the lowest possible cost. Google E-Realty.

Let’s go back to Purp’s observation:

“”But of course the listing fees don’t need to cover all the overhead of your office, since you are also providing other services from that office which share the costs. So what do you think a fair price is for just getting a property listed on MLS to cover costs and provide a nice margin? ”

How about this? You agree to pay me something that allows me to make a profit I’m happy with, and I’ll provide you the other services that share my overhead costs. In fact, we’ll call the guy at Poor Suckers MLS Access Service and let him do the MLS work. He’s a specialist at that anyway.

What? He’s gone bust? That’s too bad, because I don’t really want to provide MLS access at a price point that won’t generate a profit, but what the hell, if he can’t do the business for money why don’t I just throw it in for free? I won’t charge you for MLS access, but you have to agree to buy some other services from me that I can make a profit at.

No good? Tied selling? You don’t think the MLS access is really free? You think I’m charging you more for the agency services so that I can just pretend the MLS access is free? I’ve got to do something. If I don’t make a profit I’m out of business, and you won’t get anything out of me, not agency services, and not MLS access.

(Here’s what I can do: let me sell you brokerage services for, say $2500, and I’ll include limited agency (offer presentations and advice) as well as MLS access. I can do that. I have a competitive advantage over a lot of guys).

elvince came up with another good scenario, so I’ll use him as an exampleof a foil.

Apparently it takes 20 man hours to sell a house, a realtor deserves $25 an hour for that work, and so should charge $500 per deal plus $1000 for their broker for a total of $1500 per house. The reason commission prices are so high right now is because there are too many agents and agents refuse to cut commissions because they have a cartel to keep prices high, even though they don’t make much money.

Yes, elvince, you provided all those ingredients. It costs me about $20,000 per month to keep my show going. At $1000 per deal, as a broker, I would need 20 deals per month. Not too bad. What about the agent? To pay his rent, food and shelter he’d need, what? $4000? That’s the net he pays taxes on, right? Add to that gas, cell phone bill, advertising, licensing, car, insurance, signs and you’ve got to get to $6000 per month,right? That’s 12 deals per month at $500/per. 12 x 20 equals 240 hours per month, or about 55 per week…if every single house sells! Let’s say we have a sell/list of 50%. Let’s say he doesn’t need to do a full twice as much work (110 hours a week, now at $12.50/hour) – let’s just say he works 360 hours per month for his $6000 gross giving him his $4000 net. $6000 divided by 360 hours is $16.66 per hour to work nights and weekends as well as days.

Tell me, elvince, since you seem to buy into the idea that home selling is easy, would you work for me on those terms? Consider this a job offer. I’ll hire you as soon as you get the license. You have my word on it, and I’ve said it in public for all to read.

If you don’t like that job offer I will extend the same listing package to you. No need for 7% and 2.5%, or 6% across the board. In fact, if you want to pay a flat fee up front, fee for service rather than fee for success, I’ll make you a great listing deal. Call me on it in public and we can demolish your claim that realtors won’t negotiate commission in public. As I’ve offered before, you can negotiate on a hypothetical basis, but I’ll extend our deal to anyone who wants to take advantage of it.

Inventory for REBGV and FVREB attached and detached was 18,510, of which 5,004, or 27.03%, were over 90s. For the REBGV the numbers were 11,588, 2,987 and 25.78%. For the FVREB the numbers were 6,922, 2,017 and 29.14%.

REBGV detached and attached numbers for last week were 1,526 new listings, 404 price changes, and 610 sales for a sell/list of 39.97%.

11,588/(610*4.25) = 4.47 MOI.

FVREB detached and attached numbers for last week were 565 new listings, 203 price changes, and 288 sales for a sell/list of 50.97%.

6,922/(288 *4.25)= 5.66 MOI.

Combined detached and attached numbers for last week were 2,091 new listings, 607 price changes, and 898 sales. Sell/list was 42.95%.

18,510/(898*4.25) = 4.85 MOI.

The numbers speak for themselves. Nothing’s changed so far. Inventory is growing slightly more than sales, and expiries did not have the impact on supply that they normally do at the end of the month, but I don’t see storm clouds on the horizon right now (meaning I don’t see a repeat of spring 2008 this spring). Much as I’d like to see some falling prices this market is going to continue, I think, until another global economic shoe drops.

First chart is REBGV, second if FVREB, third is combined. All stats courtesy of the REBGV, and while every effort has been made to ensure their accuracy, the REBGV assumes no responsibility for them.

Rob’s Report Generator

Data for File: SalesMarch072010REBGV.csv

Data for File: SalesMarch072010FVREB.csv

Data for File: SalesMarch072010REBGVFVREB.csv

The process reminded me of a cassette tape seminar that the REBGV put out back in the days of cassette seminars. A group of top producers were sharing their insights, and one person (possibly Patsy Hui, if memory serves) told a story of two people looking at a sheet of paper that one held up between them. One person insisted it was white, while the other insisted it was black. Of course, the paper was white on one side, and black on the other, and when the two people finally flipped the paper they instantly recognized that each of them had been both right and wrong all along.

The point is simply that it pays to try to recognize what the other person sees. That’s what made my discussion with the web consultant so interesting. He’s not a dummy. He had tried to devise a way to download and manipulate MLS data in a way that didn’t break license agreements. He was frustrated in his attempts. He felt that the Board wanted to restrict access because the Board generates lots of income from listing fees.

Of course, the board does generate lots of revenue from listing fees. Its a 9000+ member board in a huge city with a very active real estate market. Does that mean it is a profit generating corporation looking to protect its turf?

The answer is an emphatic “no”. The REBGV is a not-for-profit organization incorporated under the Society Act of BC. Its aims and objectives include advancing and promoting the interests of those engaged in organized real estate, encouraging the study of real estate and to promote, manage and maintain systems and plans for the listing and sale of real estate – that is, to create and maintain a good quality, organized real estate market. The REBGV maintains a code of ethics and standards of business practice to which all members must adhere.

Let’s pause for a second there. The Board is a not-for-profit. It has no incentive, at Board level, to control anything to maximize profits for the board. None.

The Board has to conform to the Society Act of BC to maintain its status. If it was a for profit corporation hiding behind the Society Act I think a potential competitor could damage us (as competitors are trying to do us by attacking CREA through the Competition Bureau).

The Board maintains an high quality, organized real estate market. The data shared has integrity, and, because it is collected by members, standards can be enforced. Members can be punished if they supply inaccurate information to the Board’s database.

Aside from data integrity the Board has other standards of business practice that set out consistent ground rules for the practice of real estate. These compliment the Real Estate Services Act of BC. Failure to adhere can result in a member’s right to participate in the Board’s market to be restricted or removed completely.

These are good things. Imagine if they were not around. It would be hard to get good sales data, and you wouldn’t be able to get it for free (which you can do now). Bad information makes it tough to make good decisions about your property.

Standards of business practices are good things as well. The way real estate is generally transacted is pretty consistent throughout the Lower Mainland, and in fact, throughout BC. This is because we have rules of cooperation, and because the rules have teeth. There are benefits to the public for this. Imagine a buyer agent who, during home inspection, convinces the seller, your elderly mother, to pick up the tab for a new hot water tank. That sort of behaviour is offside according to the Board, and will be punished if proven. I know, I’ve been on the committee that punished people who have tried it.

What happens if the Board winds up its affairs? I mean, it is a big board, and it has a lot of cash and hard assets simply as a by product of organizing a huge metropolitan real estate market. What happens if the MLS and the boards are killed?

In the case of the REBGV its pretty simple. Upon wind up the assets of the REBGV are to be distributed to such charitable organizations as the members designate. Think REALTORS Care campaigns. They’d get a big payout from us.

So, that’s the Board and how its set up legally. It doesn’t have an over-riding profit motive. Its run by paid staff, but driven by volunteers who compete with each other in everyday business. I don’t think most people knew those things, and talking with a bright consultant who assumed the Board had a profit motive made me want to show all of you that it really doesn’t.

We need the database to help maintain an organized market, and we need to maintain integrity of data. We don’t need to own the data so long as integrity is assured and so long as another ownership model benefits the wider market (including buyers and sellers) in general.

Home sales activity strong through Olympic period

The Greater Vancouver housing market continued to experience strong demand from homebuyers and an increase in total property listings in a month where the eyes of the world were focused on the region.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Greater Vancouver totalled 2,473 in February 2010, an increase of 67.1 per cent compared to February 2009 when 1,480 sales were recorded and a 28.6 per cent increase compared to the 1,923 sales recorded in January 2010.

More broadly, last month’s sales totals marked a 7.6 per cent decline compared to the 2,676 sales recorded in February 2008 and were 13.5 per cent behind February 2007 when 2,859 residential sales were recorded on the Multiple Listing Service (MLS®) in Greater Vancouver.

Over the last 12 months, the MLSLink® Housing Price Index (HPI) benchmark price for all residential properties in Greater Vancouver increased 19.7 per cent to $581,911 from $486,054 in February 2009. This price is 2.4 per cent above the previous high point in the market in May 2008 when the residential benchmark price sat at $568,411.

“We don’t know at this point what long-term impact the Olympics will have on our housing market, but we do know that activity in our market remained steady through all of the excitement and distraction of the last few weeks,” Scott Russell, REBGV president said.

“In February, for example, 110 sales were recorded on the MLS® in downtown Vancouver. That’s higher than 2009 and slightly lower than the mid-2000s, which is consistent with data from the overall market. It’s too soon to say whether that’s an Olympic effect,” Russell said.

New listings for detached, attached and apartment properties in Greater Vancouver totalled 4,606 in February 2010. This represents a 17.6 per cent increase compared to February 2009 when 3,916 new units were listed, and a 10.5 per cent decrease compared to January 2010 when 5,147 properties were listed on the MLS® in Greater Vancouver.

At 11,346, the total number of property listings on the MLS® increased 11 per cent in February compared to last month and declined 21 per cent from this time last year.

“Two months into 2010, we see the total number of homes listed for sale on the rise and demand in the market strong, but less frenzied than we saw in the latter part of 2009,” Russell said.

Sales of detached properties increased 67.5 per cent in February 2010 to 983 from the 587 detached sales recorded during the same period in 2009. The benchmark price, as calculated by the MLSLink Housing Price Index®, for detached properties increased 22.5 per cent from February 2009 to $800,796.

Sales of apartment properties in February 2010 increased 65.2 per cent to 1,074 compared to 650 sales in February 2009. The benchmark price of an apartment property increased 17.3 per cent from February 2009 to $390,899.

Attached property sales in February 2010 are up 71.2 per cent to 416, compared with the 243 sales in February 2009. The benchmark price of an attached unit increased 16.2 per cent between Februarys 2009 and 2010 to $495,496.

Click here to download the complete stats package.

The Real Estate industry is a key economic driver in British Columbia. In 2008, 24,626 homes changed hands in the Board’s area generating $1.03 billion in spin-offs. The Real Estate Board of Greater Vancouver is an association representing more than 9,400 REALTORS®. The Real Estate Board provides a variety of membership services, including the Multiple Listing Service®. For more information on real estate, statistics, and buying or selling a home, contact a local REALTOR® or visit www.rebgv.org.

For more information please contact:
Craig Munn, Assistant Manager of Communications
Real Estate Board of Greater Vancouver
Phone: (604) 730-3146
cmunn@rebgv.org

REBGV detached and attached numbers for last week were 999 new listings, 294 price changes, and 564 sales for a sell/list of 56.46%.

11,213/(564*4.25) = 4.68 MOI.

FVREB detached and attached numbers for last week were 669 new listings, 211 price changes, and 281 sales for a sell/list of 42.00%.

6,920/(281 *4.25)= 5.79 MOI.

Combined detached and attached numbers for last week were 1,668 new listings, 505 price changes, and 845 sales. Sell/list was 50.66%.

18,133/(845*4.25) = 5.05 MOI.

First chart is REBGV, second if FVREB, third is combined. All stats courtesy of the REBGV, and while every effort has been made to ensure their accuracy, the REBGV assumes no responsibility for them.

Rob’s Report Generator

Data for File: SalesFebruary282010REBGV.csv

Data for File: SalesFebruary282010FVREB.csv

Data for File: SalesFebruary282010REBGVFVREB.csv

Austin pointed toward something called Network Effect that he feels explains why MLS is a natural monopoly. I can’t follow his thinking, but rather than try to dispute his claim I’ll just describe what I see in the MLS a little more fully.

I’ve described three types of listings – the open, the exclusive and the multiple. Open listings are where a seller will pay any agent who brings an acceptable offer. Exclusive listings are where a seller agrees to pay one particular agent a commission if the property sells during the term of the listing. Multiple listings are a sub-set of exclusive listings that allow the holder of the exclusive listing to share the commission with a cooperating agent on the basis of a pre-existing agreement between the agents to which the seller is not party.

Note that an open listing does not require the agent to work for the seller. In fact, since the seller will pay any agent (presumably on competion of a successful sale, but possibly on the simple receipt of an acceptable offer) its safe to assume that the agent will often be working for the buyer (whether on a de facto basis or a de jure basis) .

Note also that an exclusive listing generally specifies that payment is made to the holder of the exclusive agency regardless of who sells the property or where the offer comes from. If the property sells during the term of the exclusive listing the agent who holds the exclusive listing is entitled to payment, whether he was involved in the sale or not (he’s usually involved, since he’s getting paid, but its not a requirement). The holder of the listing is also very likely to be both a de facto and de jure agent of the seller, which is an important difference between open and exclusive listings.

Open listings are obviously not in the interests of agents. There’s too much risk involved. The agent incurs fixed costs and runs the full risks that come with the vagaries of any marketplace. It is not really in the interest of the agent to market the property, price the property or develop an agency relationship with the seller, because there is no reciprocal loyalty.

Does that mean that open listings are good for sellers? It could be argued either way, but it is clear that in an organized market an open listing is generally not the best way for a seller to achieve a satisfactory sale. There is too little commitment on his part and too much uncertainty for the agents in the marketplace. Other business opportunities are more appealing to the agents. If the seller doesn’t have a great need for an agent then clearly the open listing is workable, but history shows that in most markets agents sell houses. A quick look out the window will confirm this.

The exclusive listing is the obvious answer to the risk involved in a market dominated by open listings. The agent takes on fixed costs but reduces risk by signing a listing agreement with a seller. Once the exclusive listing is signed the agent knows that he will be paid if the property sells. It is worthwhile for the holder of the exclusive listing to market the property, price it realistically, draft an enforceable contract, and provide agency services to the seller.

Is an exclusive listing in the interests of the seller? That’s arguable, and depends on how well the listing agent can do his job. The problem is that the job involves bringing a willing buyer to the table, and that may require the agent to act as an honest broker who doesn’t favour either side. The only alternatives to that scenario are buyers who don’t have representation or buyers who have their own agent. In the first scenario the seller has to ask “will a buyer want to deal with my agent without representation?” and in the second the seller must ask “who’s going to pay the buyer’s agent?”.

Clearly, these questions are less important in a small or inactive real estate market where buyers have to meet sellers’ demands, and where one listing agent can handle all the business in the marketplace. In bigger markets volume of transactions simply makes the traditional exclusive listing system unworkable. (Take note of the use of the word “traditional” – its important if you believe that history rhymes).

In a large and active market exclusive listings are not beneficial to agents who work with buyers. At the beginning of every deal the buyer agent must take care of how he will be paid (this still occurs to a degree with commercial real estate, and works because many of the players in the market, including the principals, are very sophisticated. The residential market is very different). The buyer agent either has to have the buyer agree to pay for his services, or have the holder of the exclusive listing agree to “cooperate”. There’s no real need to justify this commission issue. Its a fact of life that few people work for free, and its accepted that people are entitled to sell their energy, time and intelligence for a profit. Most of us do exactly that.

Enter the multiple listing contract. This arrangement allows the holder of the exclusive listing to enter into a multi-party agreement with other agents specifying the terms and conditions of the listing, specifically what events will trigger commission payment and how the commission will be shared. Obviously, this arrangement allows all agents active in the market to reduce risk, plan business models and attempt to satisfy consumers. It also clearly satisfies the interests of listing agents, buyer agents, sellers and buyers.

It does this by setting out rules for cooperation between many different and competing business entities. The arrangement set out in the multiple listing contract, which is, remember, merely an adjusted version of the exclusive listing contract, is what allows competitors to band together in a trade organization and hire staff to create the advertising platform that many think of as the Multiple Listing Service. The MLS is much more than the advertising platform, however. Most important, it is the rules fo cooperation and the standards imposed by membership in the board.

So, why hasn’t the MLS been overtaken by such innovations as Craigslist or Google or Ebay (let alone Zillow)?

I think the answer is clear. MLS is not the advertising platform. Its the workable business model that allows predictable cooperation between competitors. It is the goal post in the game.

Why not allow FSBOs access to the MLS? The only valid objection I see revolves around agency and protecting licensed professionals from amateurs seeking mercy in the courts. Address that objection and I’d have no objection to that sort of access.

Why allow agents to re-sell access to the MLS and call it “creativity”? Because its not creativity. Its free riding that doesn’t benefit the wider marketplace (including buyers and sellers).

Didn’t happen.

Inventory for REBGV and FVREB attached and detached was 17,714, of which 5,225, or 29.50%, were over 90s. For the REBGV the numbers were 11,093, 3,129 and 28.21%. For the FVREB the numbers were 6,675, 2,096 and 31.40%.

REBGV detached and attached numbers for last week were 1,132 new listings, 268 price changes, and 705 sales for a sell/list of 62.28%.

11,093/(705*4.25) = 3.70 MOI.

FVREB detached and attached numbers for last week were 733 new listings, 270 price changes, and 348 sales for a sell/list of 47.48%.

6,675/(348 *4.25)= 4.51 MOI.

Combined detached and attached numbers for last week were 1,865 new listings, 538 price changes, and 1,053 sales. Sell/list was 56.46%.

17,714/(1,053*4.25) = 3.96 MOI.

First chart is REBGV, second if FVREB, third is combined. All stats courtesy of the REBGV, and while every effort has been made to ensure their accuracy, the REBGV assumes no responsibility for them.

Rob’s Report Generator

Data for File: SalesFebruary212010REBGV.csv

Data for File: SalesFebruary212010FVREB.csv

Data for File: SalesFebruary212010REBGVFVREB.txt

I asked “Why not cut the free riders out and simply allow sellers access to MLS directly?” and Jesse replied “Why not indeed. That’s the whole point I thought. FSBO is a great example of people being shut out of the de facto marketplace”.

In terms of the competition bureau, allowing FSBOs to list isn’t the point. As I understand it, if the Competition Bureau rules that CREA’s three pillar interpretation restricts competition the result will be that board members across the country will be able to sell access to the MLS without offering agency or offering a cooperating commission.

Sellers will still have to make use of a licensed real estate agent to access MLS. They won’t have to buy agency services or offer a cooperating commission. In other words, a real estate agent like me will be able to add an advertising arm to my business in addition to my agency and brokerage services.

What does that mean? In the first place, lower prices for sellers, but also less service. You get what you pay for, after all. Many think that increased competition will drive commission rates lower, but that ignores, I think, the fact that we already conduct business in a very competitive environment. Realtors wont face more competition for agency or brokerage services. They face competition from business that want to offer a service that we don’t offer now.

Instead of charging 7% and 2.5% on a sale, as we often do now, I could charge, say, $500 for access to the MLS. As a broker I would not involve a sales agent, but would have office staff process the listing (and in faact could probably automate the work and outsource it to India). We’d do all of it online except for the Fintrac paperwork, which would require a face to face meeting. The listing would turn up on MLS with a comment that MLS access only was being provided, and that no cooperating commission was being offered.

“How would you define “non-marketplace aspects of MLS”?”
I don’t know. You tell me. What I know MLS delivers is the ability to list a property on a publicly available service and a database of previous sales histories. If there is more to MLS than this I have no problem restricting free access to listings only. IMO getting previous sales history is a red herring but that’s how I invest. Others insist on knowing what others pay to make a judgment of what’s a fair price.
Realtors are provincially regulated but they are not required by law to sell a property. If one acts as an agent for another I have no problem with provincially legislated Agency. If one acts on their own accord they should not be required to hire an agent to gain access to a marketplace. Paying a small nominal fee is reasonable whether it be through an intermediary or directly through MLS. (I doubt an intermediary will make much money; the service offered has such a low barrier it will be a commodity instantly.)
As for degradation of what Realtors offer as benefits, well, I know that when I decide to sell property I’ll be employing the services of a good Realtor. Their exclusive access to MLS has nothing to do with it.

83 jesse Wed, Feb 17, 2010 | 10:27 pm Rob, BTW thanks for clearing up the different types of listings. In my experience it’s rarely properly disclosed when people contact Realtors to set up a contract. My major beef is that most Realtors don’t step through the Agency rules and laws with buyers/sellers who likely don’t transact real estate enough to be competent in the business. There are those that do properly disclose but, from what I see, most don’t in the hope of suckering in unwitting clients.

With system I’d add $500 to my gross income, I wouldn’t be offering agency or sharing a commission (two current CREA requirements) and the For Sale By Owner seller (FSBO) would have access to the MLS.

What’s accomplished? Not much, as far as I can see. The FSBO gets lots of exposure, if anyone looks or cares. He may think he’s made a deal because he’s made it to MLS.ca, but he’s faced with the obstacle of buyer agents either ignoring his listing or having them get paid by the buyer. If he doesn’t take advantage of a buyer agent he has to anser the age old FSBO questions of who holds the deposit, who writes the offer, who negotiates the counters, whose E&O insurance covers mistakes, who removes subjects and who paves the way for title transfer. Some people think those obstacles are easily handled, but generally discount the impact that an active and competitive marketplace makes on such processes.

There is a real danger to the unthinking broker who offers this service. Agency agreements are created two ways. One is through a written contract, but another is through behaviour and verbal communications. By taking the $500 MLS access deal I may find myself being sued, after the fact, by a seller who says “I didn’t understand what I was doing, and thought my $500 got me some professional service from the provincially licensed professional. Now he’s cost me $50,000 and I want justice!” I may find that the E&O insurance company accepts my contract stating I wasn’t offering real estate services to the seller, while the judge throws it out. I’m on the hook for the $50,000 personally.

Worse, both the E&O and the judge may uphold my MLS access contract with the seller, but the seller may sue the buyer agent, claiming dual representation, simply by claiming that the seller relied on representations made during offer presentation by the provincially licensed professional. (I’ve seen that happen already with a MLS access selling “real estate” company that has since gone bust).

I think those are real shortcomings that can’t be solved by a federal government bureaucrat on a mission. After all, Craigslist hasn’t solved the FSBO challenge, nor has Redfin or Zillow.

Comments?

Take Sarah Palin, Tea Partiers, politics and the US. Put them together and they’re lots of fun, as we’ve seen from various links this week.

But, where does that stuff lead?

Well, when Chip came to Palin’s defense Hippos brought up old time populists like Coughlin and Huey Long (btw, HP, that’s “Father” Coughlin to you). Were they bad? Were they good? Depends who’s writing the history, I guess, but this morning I read a column by George F. Will on populists (like Palin). He described an Arizona Senator, a maverick whom everyone liked because of his plain spoken unpredictability, and who few supported for president because of his plain spoken unpredictability. The Senator was running against a popular, social reforming Democrat, and he picked a complete unknown for a running mate. The Republicans lost 44 states that year.

The senator was Barry Goldwater (Why Not Victory?), and , as Will points out, the GOP did not pick Goldwater’s losing VP partner as the 1968 candidate. (BTW, McCain sits in Goldwater’s senatorial seat). Palin will not be the GOP’s candidate for 2014, says Will, because populism doesn’t work, and hasn’t since the time of Jackson.

It seems like a fair comment. In our own country we’ve seen populism in the past, and recently, when the Reform party had to abandon its principles and hew to the laws of politics to succeed. It will be the same in the US.

But here’s the funny, arcane, serendipitous part: when HP mentioned Huey Long I thought “C’mon, Louisiana and the South have long been very, free-wheeling and corrupt, worthy, in fact, of a Garcia Marquez rather than a Faulkner”. It put me in mind of someone I had run across in the past, and who I wanted to point out to HP: the Chief of the New Orleans Police Department, Guy Moloney. .

Moloney was in New Orleans during Long’s reign. The link above gives a splendid description of him, but remember that it was written in 1934 by the MSM. While not inaccurate, it leaves much to the imagination. When I learned of him it was as a mercenary called “Machine Gun Guy Moloney”, and he was living the high life fighting civil wars in Honduras with General Lee Christmas, (who I believe was not only larger than life, but black).

Anyway, I couldn’t read the link above on my Blackberry – not everything displays on them the way it does on a CPU, and so settled for a mention of Moloney in a Google result titled “Full text of “Mosquito Coast”" Not “The Mosquito Coast” by Paul Theroux, but a much earlier travelogue written by a Brit travelling in 1930’s Honduras. I hit the internet jackpot, if perhaps only in a small way.

Take a look and you’ll find an anachronistic gem of a book that’s apparently in the public domain. Even on the BB I couldn’t put it down. The accuracy of the description is incredible. The idiomatic Spanish is perfect (“Onde van los gringos?”). The cultural assumptions are educational (no doubt they’ll anger some readers).

Click the link, scroll down and start reading.