'For Sale' and 'Coming Soon' realtor signs have been popular of late. But CREA is forcing real estate agents to change their public-facing marketing tactics.Steve Heap/iStockPhoto / Getty Images
‘Exclusive’, ‘Off-Market’, ‘Coming Soon’: these are pitches that are increasingly being made by realtors in some of Canada’s hottest housing markets. But as of last week, organized real estate has set hard limits on how so-called “exclusives” can be marketed.
The Canadian Real Estate Association has moved to force realtors with “off market” homes for sale to post those listing on its Multiple Listing Service within three days of making any public marketing moves. On April 18, delegates from the country’s major real estate boards at CREA’s annual general meeting voted 82 per cent in favour of the measure. The three-day countdown would be triggered by any use of lawn signs, posts on social media, e-mail blasts or any mass form of communication. But agents will still be allowed to share exclusives within their own real estate office or brokerage, or in one-to-one dealings with outside agents without posting to MLS.
Individual boards have until January, 2024 to create policies to enforce the new rules.
Not everyone is pleased with the coming changes.
“At the end of the day all this does is tie realtors hands and dictate to sellers,” said Anita Springate-Renaud of Engel & Völkers Toronto. “The only benefit I see are to the boards here, certainly not the membership and certainly not the sellers, that’s the bottom line.” Ms. Springate-Renaud said she doesn’t sell a lot of properties off-market but she is concerned about unintended effects of the new rules. “You’re going to create unlicensed people to fill the void: people who aren’t beholden to CREA or board rules.”
For Paul Baron, president of the Toronto Regional Real Estate Board, the issue is one of fairness for realtors and their clients. He also noted that CREA was hoping to head off a trend that has been spreading in U.S. markets where “exclusive-only” has become policy for some brokerages.
“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,” Mr. Baron said. “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 system still allows realtors to market exclusive listings within their own brokerage ecosystems. Mr. Baron’s own Century 21 Leading Edge office, for instance, has 920 agents who could get updates on office exclusives. Companies such as Right at Home Realty have more than 6,000 agents in a potential internal market.
Exclusives were once the province of a select few: the wealthy and discrete, the politically connected or celebrities. Chestnut Park realtor Jimmy Molloy has handled dozens of so-called “pocket listings” over the years for clients who, for example, are CEOs of public companies that need to keep disclosures of C-suite moves close to the vest. But the COVID-19 pandemic gave the tactic broader appeal.
“You had more pocket listings as a reaction to concerns during the pandemic: ‘If we list something on MLS we have to let people in,’” Mr. Molloy said was a common concern. “They felt they had more control as an exclusive. … That’s how it became a little bit more a tool that a lot of agents started to use.”
Cailey Heaps, a broker for Heaps Estrin Real Estate Team, started a WhatsApp group of realtors sharing exclusives during the pandemic for exactly that reason. The group has now ballooned to more than 770 agents, large enough that it had to be migrated to secure-messaging app Signal where agents continue to share off-market listings.
“I really advocate an MLS listing for sellers: You want as much exposure as you can get,” Ms. Heaps said. But she said exclusives still have a role to play and worries that CREA’s rule will hurt agents and clients who use lists like hers to connect beyond their immediate professional circle. “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.”
“The true meaning of the exclusive listing – a need to keep it private – it’s rare,” said Jill Oudil, who was CREA chair until last week. Ms. Oudil said she has never sold an exclusive listing. She criticized an increasingly common practice in Vancouver and Toronto where “Coming Soon” signs are placed on lawns for weeks, only to be replaced by “Sold” signs without the home ever appearing on MLS.
“It’s not good for the clients or for the realtor. If [clients] don’t hear about an exclusive listing, they want to know why you as their agent didn’t know about it,” she said. “I think it’s about making sure the public’s protected.”
Agreement at CREA wasn’t unanimous, the highest profile dissenter to vote against the plan was the Calgary Real Estate Board, and for CREB chair Christian Twomey it was as much a practical issue as a philosophical one.
“We felt and argued this was an overstep of CREA into our jurisdiction. With this policy, they stepped into the transaction, and we felt and feel that is between realtor and client and is governed provincially or by boards,” said Mr. Twomey. He noted that the number of exclusives traded among his 6,800 members is vanishingly small, making it hard to justify the trouble of a new rule. Nevertheless: “I have to be very clear; we will back this, we are a compliant and well-respected member of the CREA,” he said.
Adam Weiner, a Toronto salesperson who runs a team with Harvey Kalles Real Estate, goes on social media to advertise his ability to close deals “that have nothing to do with MLS” and doesn’t believe the new rules will affect his niche.
“Clients love exclusives,” said Mr. Weiner, who said he’s participated in 10 off-market transactions since January. Many of his clients are builders, buyers or sellers looking to deal in midtown Toronto properties where inventory is exceedingly low. He said, for sellers, exclusives can be about getting generous closing terms – eight or even 12 month closings for some undergoing life transitions for example. Exclusive selling might get more difficult for those who use non-MLS marketing, but Mr. Weiner said he already prefers the cut and thrust of one-to-one networking CREA’s new rule will mandate. “It’s like guerrilla warfare … people know to call me,” he said.