Union city condos.Special housing can be exempted! The latest policy of the Canadian Real Estate Association (CREA) will require almost all second-hand home sales to be listed on the multiple listing system (MLS), preventing some real estate agents from privately promoting properties, known as the “dark market” by the Chinese.Please Visit: Union city condos to Get Your VVIP Registration Today!
This policy will come into effect on January 1, 2023. The association believes that this will be in the best interests of both buyers and sellers, but there are also concerns that it limits brokers’ ability to provide customized services to clients and limits the choices of brokers and consumers.
The Financial Post published an article by Murtaza Haider and Stephen Moranis on Monday, pointing out that the new rule is good for both buyers and sellers.
According to the article, economic theory and empirical evidence show that it is in everyone’s interest to open markets and transactions where both buyers and sellers have access to all information because of transparency and market efficiency.
When listing information is spread only in a closed circle, the interests of consumers are often harmed, thus depriving potential buyers of the opportunity to bid. But it is easy to imagine that sellers might prefer private listings.
For example, celebrities and others with legitimate privacy concerns may choose to sell real estate in a closed circle. The new policy takes care of such sellers and recognizes two different ways of marketing. “office exclusive” refers to a house that is not publicly marketed at the written request of the seller. According to the seller’s written instructions, real estate agents can use their private network to sell property to those who have a direct business relationship with a listed brokerage firm.
Another method of public marketing is the “business as usual” model, that is, selling a property to the public or to real estate agents who “do not have a direct business relationship with a listed brokerage company”.
If real estate agents use traditional methods to promote exclusive listings, such as courtyard signage, flyers or digital marketing, they will “lose their exemption” and must be put into the MLS system within three days of public marketing, just like other houses.
The policy does not include commercial real estate, multi-residential housing under construction and rental housing.
The article points out that conflicts may sometimes occur because the preferences of buyers and sellers are very different. For example, blind bidding may be the first choice for sellers rather than buyers. How does the new policy serve the unique interests of buyers and sellers?
Exclusive marketing is obviously not good for most buyers. The selective marketing of a home to different groups deprives most potential buyers of opportunities and may discriminate against other races or minorities.
Exclusive marketing is also unlikely to be in the interests of sellers. As a trading platform, MLS provides the largest market exposure for all listed houses. Once it appears on MLS, buyers from all over Canada and even around the world can see it, compare it with other listings, and decide whether to consider it further. Economic fundamentals show that the higher the exposure, the fiercer the competition, resulting in faster sales at the right price.
A study published in 2009 in the American Economic Review compared MLS with homeowner-sold (For-Sale-by-Owner,SBO) listings and concluded: “FSBO is less effective in terms of sale time and probability.” But the author also recognizes that more patient sellers sometimes choose FSBO.
Finally, the article points out that in a hyperconnected world of Internet, social media and ubiquitous information availability and flow, the network and its size are crucial. MLS is still the largest network for real estate marketing. Ignore it and you will suffer the consequences.