BAM Key Details:
- On April 18, a new rule by the Canadian Real Estate Association (CREA) forcing realtors with “off-market” homes to add them to the MLS within three days of any public marketing moves passed with 82% of votes in favor.
- Agents are speaking up either in opposition or in defense of the new rule, with at least one exclusive-only realtor shrugging it off as a non-issue.
We see the words more often now than we used to:
- “Coming Soon”
During the pandemic, buyers and sellers alike saw an advantage to exclusive listings since it meant fewer people showing up and sharing the same space. Since then, these pitches are made with increasing frequency by real estate agents in the hottest housing markets in Canada.
As of April 18th, however, the Canadian Real Estate Association (CREA) has voted in favor of a rule that would force real estate agents to add their off-market listings to the MLS within three days of any public marketing—including yard signs, social media posts, and email blasts.
In fact, any mass form of communication for these listings will trigger the three-day countdown.
That said, real estate agents in Canada will still be allowed to share exclusive listings within their own office, team, or brokerage—or in one-on-one communications with outside agents—without posting to the MLS.
While 82% of the delegates at CREA’s annual general meeting voted in favor of the new rule, quite a few real estate professionals are now speaking out in opposition.
Meanwhile, individual boards have until January of 2024, when the rule goes into effect, to create policies enforcing it.
Voices opposing the new CREA rule
Anita Springate-Renaud of Engel & Völkers Toronto is one of the dissenting voices, arguing that all this new rule does is “tie realtors’ hands and dictate to sellers.” The only benefit she sees is to the real estate boards, while members and sellers pay the price.
While she herself doesn’t sell a lot of off-market properties, she expressed concern about the unintended consequences of this new rule:
You’re going to create unlicensed people to fill the void: people who aren’t beholden to CREA or board rules.
Arguments in its defense
For one advocate for the new rule, the issue behind the CREA measure is one of fairness for both realtors and clients. Paul Baron, president of the Toronto Regional Real Estate Board, sees the rule as a countermeasure to head off a trend spreading in U.S. markets where some brokerages have adopted an “exclusive-only” policy.
There were companies that were trying to say: ‘We’re not going to participate in the MLS. We’re going to have everything listed with us, so everybody has to come to us to buy,’ And I don’t think that’s a good system. After they sold it, they’d post it on MLS to get recognition – using it when they wanted to but not on a continuous basis. And that is unfair.
The new rule still allows real estate agents to market exclusive listings within their own office, team, or brokerage ecosystems. For instance, Mr. Baron’s Century 21 Leading Edge office has 920 agents with access to office exclusives. And companies such as Right at Home Realty provide access to a potential internal market to over 6,000 agents.
Jill Oudil, who was CREA chair until last week, argues that the need for listings to be private is rare, and she criticized a growing trend in Vancouver and Toronto where “Coming Soon” signs appear on lawns and remain there for weeks only to be replaced by “Sold” signs without the property ever making an appearance on the MLS.
Arguing that this practice benefits neither the realtor nor their clients, she pointed out that when clients learn about an exclusive listing that sold without their knowledge, “they want to know why you as their agent didn’t know about it.”
How did “exclusive” listings become so widespread?
Not long ago, exclusive listings were limited to a select few: mainly the wealthy and discrete, among them the politically connected or celebrities who need to limit disclosure of their movements and addresses.
When the COVID-19 pandemic hit, the appeal of exclusive or off-market listings grew. Once a property was listed on the MLS, agents had to let people in. Keeping a listing exclusive gave agents and their clients more control over the number of people showing up for a home tour.
It was a health concern during the pandemic. Now that social gatherings are less problematic, plenty of agents and sellers alike still prefer the exclusive or off-market approach, especially those who want their whereabouts known only to a carefully-vetted few.
Jimmy Mollow, a Chestnut Park realtor, has handled several so-called “pocket listings” for C-suite clients who require greater discretion when it comes to their movements and whereabouts.
Cailey Heaps, a broker for the Heaps Estrin Real Estate Team, started a WhatsApp group of real estate agents sharing exclusive listings during the pandemic for just that reason. That group has now exploded to over 770 agents and has since migrated to secure-messaging app Signal, which agents still use to share off-market listings.
While advocating for an MLS listing for sellers—to get them as much exposure as possible—Ms Heals argues that exclusives still have an important role to play in the market. She worries that the new CREA rule will hurt those who use groups like hers to connect with agents outside their immediate professional circle. If the only way they can learn of exclusive listings is through one-on-one communication with these outside agents, they’re likely to miss out on many opportunities to find ideal homes for their clients.
You think about some new agent starting out who’s keen and wants to do well, what if they don’t have the connections? The way [CREA] structured it is damaging: If they are limiting exclusives to one-to-one interactions, they are limiting the outcome for sellers.
Dissenting voices at CREA
As mentioned earlier, 82% of the vote favored the rule, which means 18% voted against it. One of those opposing the rule was Christian Twomey, chair of the Calgary Real Estate Board, for whom the rule is as much a practical issue as a philosophical one.
In Twomey’s view, CREA overstepped—interfering with transactions best left to Realtors and their clients, as well as to their provincial governing boards. He also noted that the number of off-market listings traded among the 6,800 members of his board is “vanishingly small,” which makes it hard to justify the trouble of imposing this restriction.
That said, he made it clear he has every intention of enforcing the new rule as a well-respected and compliant member of the CREA.
And some don’t really care
Not all agents in Canada have strong feelings about the new rule. Adam Weiner, a Toronto salesperson running a team with Harvey Kalles Real Estate, uses social media to advertise his ability to close real estate deals “that have nothing to do with MLS.” He’s not worried because he doesn’t believe the new CREA rule will affect his niche.
Mr. Weiner has participated in 10 off-market transactions since the beginning of 2023. His clients—many of whom are builders, buyers, or sellers looking to deal in midtown Toronto properties where inventory is extremely limited—prefer this approach. His sellers, for one, see it as a way to get more generous or flexible closing terms, with some opting for eight- or even 12-month closings to allow more time for life transitions.
Off-market selling might get more challenging for those using non-MLS marketing, but Mr. Weiner already practices—and prefers—the one-on-one networking mandated by CREA’s new rule.
It’s like guerrilla warfare … people know to call me.
Top takeaways for real estate agents
Whether or not you deal with these transactions on a regular basis, you can look for ways to give your clients a VIP experience as a buyer or seller in today’s market—simply by going above and beyond what the average agent is willing to do.
Part of that exceptional service can include one-on-one videos keeping your clients updated on the housing market (especially locally) and on any changes that could impact or interest them.