Canada’s real estate
agents have rejected an offer to try to settle allegations of
anti-competitive behaviour, saying they would rather take their chances
on a court showdown than make further concessions to appease Ottawa’s
competition watchdog.

Melanie Aitken, the Commissioner of
Competition, yesterday opened the door to negotiations with the Canadian
Real Estate Association, the body that represents the country’s 98,000 real estate agents.
Ms. Aitken, who has alleged that CREA keeps prices artificially high
for real estate services by tightly controlling who can access the
popular Multiple Listing Service, said yesterday that her office “would
much prefer to have this resolved consensually” than pursue a legal
fight.

But Georges Pahud, CREA’s new president, said his group has
already made a number of changes to respond to the criticisms and
doesn’t intend to make more.

“We need to do away with these legal
issues properly so we can move on and get back demonstrating the value
of realtors,” said Mr. Pahud.

The Competition Bureau filed charges
with the Competition Tribunal in February, alleging that CREA’s strict
rules governing the listings service make it impossible for competitors
to offer innovative services to consumers, such as flat-fee listings or a
la carte services based on minimal levels of service.

Until
Monday, anyone who wanted to list their home on the Realtor.ca site –
the public face of MLS, where about 90 per cent the country’s homes are
sold – were required to employ an agent through the entire process and
pay a commission when the home sold. In essence, the system required the
consumer to pay an agent for services they may not have wanted – such
as conducting open houses and handling negotiations – in order to gain
an MLS listing.

The commission is usually 4 to 5 per cent of the
sale price of the home. That means it would cost between $13,100 and
$16,400 in commissions to sell the average Canadian home, using the
January average price of about $328,000.

In a last-ditch bid to
satisfy the commissioner’s concerns and head off the court case, CREA
passed rules at its annual general meeting Monday that make it possible
for someone to pay a realtor to place the house on the listing service
for a flat-fee, and then handle the rest of the sale without the agent’s
help. While CREA said the changes were intended to satisfy Ms. Aitken’s
concerns, she said the changes were largely meaningless because the
association retained the right to alter the rules at any time.

“What
they preserved was an absolutely open-ended blank cheque opportunity to
pass any rules that they wanted including highly anti-competitive
rules. So give with one hand, take away with the other,” she said
yesterday at a public appearance in Calgary. “They could reinstate the
exact same rules or they could instate even more anti-competitive
rules.”

Ms. Aitken said that a negotiated settlement is “always
our preference.”

“But when faced with a situation where CREA’s
leadership simply wasn’t prepared to deal with us to resolve the
problems in a way that we felt was going to be effective, instead of
just sort of an illusion, we feel we have no choice but to go to the
Competition Tribunal to try to get a permanent solution. That said, if
CREA wants to talk to us and we can get a permanent solution through a
consent order, we’re all ears.”

As it stands now, there is no
incentive for realtors to offer new, scaled-back services to consumers
and there’s no downward pressure on prices, she said.

CREA has
until tomorrow to file its defence with the Tribunal, and a hearing
could take place in the fall. The Competition Bureau could still
withdraw the charges if the two sides reach a deal before the hearing.

An
executive at one of the country’s largest real estate brokerages said
yesterday that the industry should stop fighting the Competition Bureau
and begin rebuilding their relationship with the people who buy and sell
homes. Taking the case to court rather than making some concessions on
wording doesn’t do anything to help the industry’s already tarnished
image, said Michael Polzler, executive vice-president and regional
director of ReMax for Ontario and Atlantic Canada.

“The fight is
over and we lost,” he said. “Let’s implement these reasonable changes,
because I don’t think anything they are asking for is outrageous in this
age of technology. How can it be unreasonable for consumers to have
options? Let’s move on.”