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How CREA handles buyers’ commissions is facing a competition probe

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The Competition Bureau is calling on Canadians to weigh in on real estate commissions and policies of the Canadian Real Estate Association (CREA) as part of a probe into potential anti-competitive conduct.

In a statement on Thursday, the Competition Bureau said it had obtained a court order to advance its investigation into the possible conduct by the CREA related to rules about real estate commissions.

The investigation is looking to determine if the CREA’s commission rules discourage buyers’ realtors from competing to offer lower commission rates or has an impact on competition, such as higher costs for both buyers and sellers.

Under the CREA’s commission rules, the Competition Bureau notes, sellers’ agents are required to offer compensation to the buyers’ agents for properties listed on a Multiple Listing Services (MLS) system.

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The bureau is also trying to determine if the association’s cooperation policy makes it harder for alternative listing services to compete against those under the CREA, while potentially reducing competition among Realtors or giving large real estate brokerages an unfair advantage.

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These alternative listing services typically provide a different platform than the MLS systems often used to list and market real estate properties.

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Under the court order from the Federal Court, the CREA will be required to produce records and information that is relevant to the investigation.

It’s not the first time, however, the Competition Bureau has looked into concerns with the CREA.

In 2010, it reached an agreement with the association over concerns that MLS system rules restricted the choices of consumers and prevented different business models from emerging.

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The  Competition Bureau says the association changed its MLS rules as a result, clarifying that the nature of services provided was a matter of agreement between Realtors and their clients.

Six years later, the Bureau also saw the Competition Tribunal rule in its favour in a case against the Toronto Real Estate Board relating to anti-competitive conduct restricting brokers’ and consumers’ access to historical home sales data and “novel” real estate services, such as websites that would give consumers more in-depth listing information.

Canadians’ input shared with the probe will be used to assess if the CREA’s commission rules or Realtor cooperation policy raises any issues under the law, the Competition Bureau says.

People are asked to provide feedback by Nov. 6 through their website.

“We are not aware of any determinations or conclusions made at this time. Rather, as part of its investigation, it’s typical for the Competition Bureau to seek a court order (as it is currently doing) to produce records and provide written responses. We’re cooperating with the Bureau as part of this investigation phase,” the CREA said in a statement to Global News.

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