In 2010, the Federal Government Canadian Competition Bureau (Competition Bureau) was successful in forcing the Canadian Real Estate Association (CREA) to change its rules governing real estate “agency” in Canada. CREA is a national association that represents more than 100 real estate boards and over 100,000 REALTORS^® across Canada. CREA, its member boards and all of their REALTORS^® own and operate the Multiple Listing Service^® (MLS^®). An agency relationship is when two parties agree to have one party act on behalf of the other. Therefore, in real estate, an agency relationship is created when homeowners agree to have a REALTOR^® act on their behalf.

The Canadian government has long believed that the MLS^® System effectively holds a monopoly on resale homes in Canada. What the Competition Bureau was trying to achieve with these rule changes, was to provide Canadian homeowners with more choices when they did choose to hire a REALTOR^® to sell their home on the MLS^® System. They reasoned that if the rules were changed to allow alternative real estate models to exist within the MLS^® System, then commission rates would be forced down. Prior to the rule changes, all REALTORS^®, by virtue of their own rules, essentially had to offer “full service” when listing a property. It did not matter whether the REALTOR^® belonged to a discount real estate company, or a traditional brokerage, if a home was listed on the MLS^® System, that REALTOR^® was required to enter into an agency relationship with the seller. This agency relationship had to continue until either the contract was terminated, expired or the home was sold and the transaction was completed.

The most significant outcome that resulted from the aforementioned rule changes is that REALTORS^® are now able to post a property on the MLS^® System without ever entering into an agency relationship with the home seller. The REALTOR^® can simply enter your listing into MLS^® System and then have no more involvement with you or the sale of the property. Such a listing within the MLS^® System is called a “mere posting”.

Mere postings allow REALTORS^® to limit their involvement on a MLS^® listing to a relatively short and definable time frame. After the home is listed, the homeowner takes complete control of the selling process. Any cooperating buyer’s agents would call the home owner directly, rather than the listing agent, if they wanted to show the property to their buyer. Additionally, if a buyer’s REALTOR^® wanted to submit an offer on behalf of his client, the offer is given directly to the seller, not the listing agent. In other words, the listing REALTOR^® is finished upon entering a mere posting into the MLS^®. The only obligations of the listing REALTOR^® after posting the listing is to amend the listing when necessary such as a price change or status change from active to sold.

As a result of the very definable work that a REALTOR^® does for a mere posting, the traditional commission-based remuneration has given way to a comparatively small “pay in advance” flat fee. This flat fee only compensates your listing agent and it is left for you to decide what, if anything, you want to offer out to any and all cooperating buyer’s agents. The amount of cooperation you receive from REALTORS^® will depend, in part, on the amount of buyer’s agent commission you offer. Obviously if you choose not to pay a buyer’s agent commission, REALTORS^® will not bring their buyers to your home and you will be relying on unrepresented buyers only.

Additionally, if you want to do a mere posting on the MLS^® System, you will have to find a brokerage that offers this type of service, like rhinorealty. Most traditional and full service discount real estate companies have chosen not to offer this option to their clients. At rhinorealty, we offer both, a Flat Fee Full Service Program in which we do enter into an agency relationship with our clients, and For Sale by Owner (FSBO) Package where we do not enter into an agency relationship.

The success rate for mere posting listings on the MLS^® System is comparable with full service listings’, providing the home has been priced properly and there is a fair buyer’s agent commission included. Obviously, the success rate diminishes if the home is over-priced and/or there is no buyer’s agent commission being offered.

There are two reasons why mere postings may not succeed as often as full service MLS^® listings. First, if the homeowner drops the ball when it comes time to fielding calls on their property. In a fast paced real estate market like Alberta, a missed showing can very well amount to a missed sale. For this reason we encourage you to include a REALTOR^® Key Lockbox with your For Sale By Owner (FSBO) Package. This will allow all REALTORS^® secure access to your property when you’re not available. Secondly, it’s human nature to want to get the most for your property. The result of this is that mere postings on the MLS^® System are commonly over-priced and consequently not competitive. For this reason, we will email you a set of the most recent and relevant comparable sold listings that match the size and style of your home, from the same community or residential area. This information will allow you to choose a competitive price for your property and get you started on the right foot. So, if you are willing to deal with the calls on your home in a timely and professional manner, and you price your home properly, you stand a very good chance for a successful sale.