Great article on the weekend in the Globe and Mail, entitled The battle to unlock the housing market about the real estate industry and how some companies are fighting back against the MLS and some people believe its unfair that more people aren’t able to list their properties on MLS, and have to use a real estate agent.

Last year 465,251 homes were sold through MLS at an average price of $320,333. Owned by CREA, MLS aggregates listings from Canada’s 101 local real estate boards. Only registered real estate brokers can get key information such as past selling prices, and only these professionals can use the the site to connect buyers and sellers. Housing information is freely available in other countries, such as the UK, where the property market is massive, and anyone can find out how much their neighbours sold their house for, or how much a prospective purchase was sold for in the past, with a simple search on the internet. It provides transparency and empowers consumers to do alot of their own research, to help them make informed decisions, without relying on a real estate agent, who has access to “secret” information, and you have pay 5% of your property value, to have them share this with you.

The federal Competition Bureau, is now interested in this, and is questioning whether consumers be forced to use a real estate agent to represent them throughout the entire buying/selling process.

One of the largest for sale by owner websites in Canada, is Propertyguys.com, which enables buyers and sellers to connect through their website, with the onlly costs being a small charge for the house owner to list their property on the website. This is usually for around $500 and is an amazing deal if you compare this to $15,000 in commissions that would be due based on a sale of a $300K house at 5% commission.

The Globe and Mail had a live blog session with Walter Melanson, the VP of Propertyguys.com today, and here were some of the key comments:

Question: People have no limitations on selling their own homes – if they want to sell their homes – they can – if they want to use a real estate sales rep. they can – why all the big fuss?

PG: That’s exactly our sentiment. You are right – It’s all about options. I think the fuss is all about what the market perceives their options are. Given the state of the industry it doesn’t seem like many options exist.

G&M:
Some people think private sellers are at a disadvantage because the homes can’t be posted on the MLS, which is owned by the Canadian Real Estate Association. If you want your home on there (that’s where it’ll get the most eyeballs), you need to employ and agent through the whole process. Some feel that isn’t fair, that you should be able to post your listing there and still handle most of the details yourself.

Question: Aside from the obvious $ saved are there more benefits to both parties that are not so obvious?

PG: We don’t feel that Private Sellers are at a disadvantage at all. Our feel is that the internet levels the playing field. Selling a house is all about letting people know its for sale. We’ve been successfully doing that!

Question: Are there any legal risks or pitfalls that a real estate agent will help to prevent a seller or buyer from encountering? Can a lawyer fill this gap at a much cheaper cost?

PG: Our system weighs heavily on interaction between lawyer and seller. Most people are totally comfortable with that. We feel that a lawyer is best equipped to handle situations surrounding mitigation of fraud or any other legal concerns.

Question: I have heard of people having deals not go through because CMHC has denied the deal because it was being handled as a private sale. Can you explain what that situation is?

PG:No. We don’t see that mortgage insurers are predjudice on types of deals. They are simply mitigating risk on a property by property basis. In our case – we help parties supply all relevant information for CMHC to input into their system.

Question: What is the average difference in time on the market for a private sale vs. one with an agent? ?

PG:When we examine data, we see that private sellers (given proper mix of Price/Product/Exposure) sell on average sooner.