Rules shut door on realtor touting ‘1 cent’ listings
July 30, 2010
Tony Wong
BUSINESS REPORTER
Dawson Pereira thought he had a sure-fire way to get the attention of consumers interested in saving money while selling their homes.
In May he launched a brokerage service touting “one cent” listings on the Multiple Listing Service.
The former ReMax agent charged an upfront fee of $600 to list the property on the database of homes for sale. If the home sold within 10 days, he refunded the difference minus a penny.
“People were really excited about this because they had an alternative,” said Pereira.
But the realtor claims he had to shut down his websites on July 23 after being told he was in violation of regulations by the Toronto Real Estate Board and the Canadian Real Estate Association.
“I didn’t realize I was breaking any rules. I was just offering people an alternative, but they gave me a major hard time,” said Pereira.
The realtor was one of the first wave of upstart discount companies to launch in Canada after CREA was accused by the federal Competition Bureau of restricting competition.
Pereira said his problems started when he listed his client’s contact numbers, which would be available on the MLS.ca website. This allowed private buyers to contact the seller without going to an agent.
Pereira said he got notice from TREB officials saying he was in “contravention” of their rules.
“They basically want everyone to contact an agent first so they can make their commission, but that doesn’t save the consumer anything,” said Pereira.
While he was not ordered to shut down his business by TREB or CREA, he said the rules preventing the public listing of contacts means his business model is not viable, and has resulted in termination of listings and refunds to customers.
TREB said Pereria remains “a member in good standing” and referred Competition Bureau issues to CREA, the national governing body for realtor associations.
Earlier this year, CREA changed some of its rules after criticism from the Competition Bureau.
One rule it did not change was that the seller’s contact information “not appear on Realtor.ca or in the general (public) remarks section of a listing on a Board/Association MLS system.”
The rule became one of the sticking points that prompted Competition Commissioner Melanie Aitken to take the organization to court.
“CREA’s rules were amended to clarify that a seller’s contact information can be included in the Realtor only (private) remarks section of a listing,” CREA lawyer Catherine McKenna said in a letter to Pereira. “This means that a Realtor may direct buyers’ agents to contact the seller directly for appointments if the seller instructs the Realtor to this effect in writing.”
That means the seller’s name is still allowed on the MLS, but in a section accessible only to agents.
David Fraser, a Georgetown man who signed up with Pereira, said this does not help those who want to sell their own home. Fraser says he could have saved more than $15,000 in commissions on the sale of his four-bedroom home, listed for $337,000.
“The MLS has a lot more reach, but it doesn’t do you any good if no one can contact you directly,” said Fraser, who terminated the listing.
Pereira’s problems did not end there. He received a letter from CREA lawyer David Gray last month telling him he had infringed on the organization’s trademark by using the words MLS and REALTOR incorrectly.
Pereira’s website, which included 1centMLSlisting.com and savetherealtorfees.com had the words “MLS” and “Realtor,” both of which are trademarked by CREA. The word “REALTOR” cannot be used in a domain name since it is not to be displayed in lower case letters.
Pereira, meanwhile, thinks the new-found perestroika in the real estate business may be an illusion.
“I’m just a little guy trying to make a living and passing on savings to consumers,” he said. “It’s just so frustrating. I think it’s impossible to win this fight.”