Listed at $2.999-million, 566 Deloraine Ave., Toronto. had eight showings in the three-day exclusive period and five more additional buyer showings on the first MLS day. Within 12 hours of listing om MLS, it received an offer $219,000 over the asking price.Harvey Kalles Real Estate Ltd.
Realtors are finding new workarounds to bypass the industry regulator’s crackdown on “exclusive” real estate listings almost two years after the Canadian Real Estate Association moved to restrict the practice nationwide.
“I’m a fixer of broken things, and I think so much of real estate is sort of broken,” said Catharine MacIntosh, a realtor with Bosley Real Estate and the founder and CEO of an app called Listed. The app claims to create a way to get around rules aimed at stopping agents from widely marketing their “exclusive” properties.
As of January, 2023, CREA has had a policy known as the “Duty of Cooperation” that puts a cap on how much marketing a realtor can do with any property they are not using an MLS to sell. It doesn’t entirely block so-called off-market, exclusive or pocket listings, but if realtors want to use alternative “one-to-many” marketing tools – such as social media, flyers, “coming soon” yard signs, digital newsletters and message boards – they are required to post that private listing on an MLS within three days of any mass marketing.
Critics argue these rules are about protecting the value of the boards that own the MLS system. The provincial real estate boards say the MLS system gives buyers and sellers equal access to the real estate market.
Ms. MacIntosh believes her app is compliant with the co-operation policy because it relies on the exceptions in the rules: a realtor can advertise to colleagues within their own brokerage, and one-to-one messages (calls, emails, etc.) from a listing agent to outside buyer’s reps are also allowed.
The Listed app inverts the normal MLS experience by keeping the exclusive listings private until another realtor creates a search that might capture the off-market property. That search generates a notice to the exclusive-listing agent, who can then decide whether or not to share in a one-to-one message the private listing details with that agent. The functionality is similar to dating apps like Hinge and Bumble that give a user more choice about who they want to connect with, instead of having to deal with a flood of unsolicited interest.
“It achieves both privacy and exposure for sellers. This is the most fair system to gain exposure and put your seller in control,” Ms. MacIntosh said. She admits that the app has not been approved by her local board, the Toronto Regional Real Estate Board. But she says she has not been told she’s violating any rules since she started soft-launching the product over the summer.
About 3,000 agents have signed up for the app, Ms. MacIntosh said, and there are usually between 10 and 20 exclusive listings on the platform at any given time, most in Toronto.
Even before the CREA rule came into effect, there have been numerous private chat groups with agents sharing exclusive listing details. One of the largest such groups was run by Cailey Heaps, broker of record for Royal LePage Heaps Estrin Team in Toronto. She has shut down the 1,000-member Signal chat group and moved her exclusive listings to Listed.
“It became onerous,” said Ms. Heaps. “I don’t like policing people.” Ms. Heaps said there were questions about who was supposed to report to TRREB or other boards if the exclusives marketed on the private chat room didn’t end up on MLS. In her experience, she said, there are perhaps 100 exclusive listings in the GTA at any one time. She said her brokerage has at least 10 currently.
Realtors say there is increasing demand from their clients to find ways to market and sell homes without exposing themselves to the broader public via the Internet. Sometimes this is from public figures who fear for their security, sometimes simply seller reluctance to have a lot of strangers ogle their home.
But Ms. Heaps argues exclusive listings aren’t always the best financial choice.
“There are times when exclusive is the right way, but it doesn’t automatically create value to go exclusive,” she said.
Finding a creative way around the rules to let exclusive sellers discover the demand (instead of the demand discovering them) is one thing, but some agents have found ways to make the more restrictive co-operation policy work for them.
“We’re all trying to stay compliant with CREA; I use the exclusive period to my advantage,” said Andre Kutyan, a broker with Harvey Kalles Real Estate Ltd. Mr. Kutyan has found he can exploit the three-day exclusive window before posting on MLS to generate a sense of urgency for buyers, inspiring a little FOMO (“fear of missing out”).
“I tell them I’m not going to look at any offers until it goes live,” he said. “The beauty is, buyers are seeing each other coming and going from this house before it’s on MLS.” By the time the listing hits MLS, Mr. Kutyan said, it’s almost too late. He cites an example from earlier this month: “I had a listing on at 566 Deloraine Ave. for $2,999-million. I had eight [buyer] showings in the three-day exclusive period and five more additional buyer showings on the first MLS day. Within 12 hours of it going live I had an offer $219,000 over asking.”