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REALTOR Cooperation Policy: Bad for Consumers, Great for CREA!

Learn how CREA’s Realtor Cooperation Policy impacts exclusive listings, restricting public marketing without MLS® listing.
Written By: Baron Alloway

In a world where real estate marketing is becoming more diverse and creative, recent updates to the Canadian Real Estate Association (CREA)’s Realtor Cooperation Policy may feel like a step backward to many agents. For real estate professionals who rely on exclusive listings or tailored marketing strategies, this policy has introduced significant restrictions. In this post, we’ll explore what the policy entails, why it feels limiting, and how agents and sellers can navigate these changes.

What is the CREA REALTOR Cooperation Policy?

The REALTOR Cooperation Policy, introduced by CREA, aims to encourage transparency and collaboration among real estate agents by promoting the use of the MLS® system. It reinforces the idea that a centralized system benefits both agents and consumers by increasing property visibility, enhancing competition among buyers, and ultimately driving better offers for sellers.

On the surface, this sounds like a reasonable goal. After all, MLS® is a widely trusted platform that real estate professionals across Canada (and the world!) use to showcase properties and facilitate smooth transactions. By listing a property on MLS®, sellers can expect their property to gain the attention of a vast network of agents and their clients, while buyers have access to a more comprehensive range of homes.

However, the policy has one crucial stipulation that has sent ripples through the industry: any property that is publicly marketed must be placed on MLS® within three days. This requirement has raised concerns, particularly among agents and sellers who prefer exclusive listings. Let’s break down how this change affects the real estate landscape.

What is an Exclusive Listing?

The problems begin with how we are describing an “Exclusive” listing and what exactly the term exclusive means.

The True Definition of an Exclusive Listing

In a broader real estate context, an exclusive listing refers to a property that is contracted with one specific brokerage to market and sell the property. It’s an agreement between the seller and the brokerage, ensuring that no other agents or brokerages can represent the seller in the sale. This is the true essence of an exclusive listing—it’s not about where the property is marketed (whether on MLS® or not), but rather about who has the right to represent the seller.

Non-Exclusive Representation vs. Exclusive Listings

Here’s where the distinction gets even more specific:

  • Non-Exclusive Representation Agreements: In a non-exclusive agreement, a seller may work with multiple brokerages at the same time, and only the agent who brings the buyer earns the commission. This is different from what CREA would call an “exclusive listing,” because, in this scenario, the property may or may not be on MLS®. The key factor is that more than one brokerage is involved.
  • Exclusive Listing Agreement: This refers to an agreement where the seller works with one brokerage only to market and sell the property. Whether the property is on MLS® or not, it is still an exclusive listing if only one brokerage has representation rights. Many times, these properties are not on MLS®, which adds to the confusion, but the true defining factor is the exclusive right to sell, not the marketing method.

CREA’s Definition of “Exclusive”

Under CREA’s Realtor Cooperation Policy, exclusive listings are generally understood as properties that are not placed on the MLS® system. If a property is marketed without being listed on MLS®, it’s referred to as an exclusive listing, implying that its exposure is limited to private or targeted marketing efforts and that the property won’t be publicly visible to other agents through MLS®.

However, this definition focuses on the absence of MLS® involvement rather than the true nature of exclusivity.

The Misinterpretation of Exclusivity

CREA’s policy is addressing the public marketing aspect and equating that with exclusivity, but this is a limited view. A property can be exclusively listed with a brokerage and still be placed on MLS®. The two concepts are not mutually exclusive:

  • Exclusive Listing: Refers to exclusivity with one brokerage.
  • MLS® Listing: Refers to the method of public marketing.

In this sense, a property can be exclusive to one brokerage but still marketed through MLS®. Conversely, a property can be non-exclusive (multiple agents involved) but not be placed on MLS®, though this scenario is rare.

Why This Distinction Matters

Understanding the difference between these definitions is crucial for agents and sellers alike:

  • For Agents: It’s important to explain to clients that an exclusive listing does not simply mean the property is kept off MLS®. Exclusivity refers to the brokerage’s sole right to represent the seller.
  • For Sellers: Sellers should understand that they can still achieve broader exposure by listing on MLS® while maintaining an exclusive representation agreement with a single brokerage. This hybrid approach often yields the best results, combining the control and privacy of exclusive representation with the broad reach of MLS® marketing.

Why Choose an MLS® Exclusive Listing?

Exclusive listings give sellers more control over how and to whom their property is marketed, offering a more private and targeted approach.

Sellers often choose exclusive listings for several reasons:

  • Privacy: Some sellers, especially those with high-profile properties or personal reasons for selling, don’t want widespread public attention.
  • Targeted Approach: The property may only be marketed to a select group of potential buyers, limiting exposure but creating a more exclusive market.
  • Control: Sellers and agents may prefer the control offered by exclusive listings, where the marketing, negotiations, and sale can be managed in a more personalized manner.

Exclusive listings also allow agents to showcase their marketing skills and focus their efforts on a limited but highly interested group of buyers. For many in the industry, this flexibility is seen as a key advantage. However, CREA’s new policy has introduced significant roadblocks to this strategy.

How the Cooperation Policy Limits Exclusive Listings

The Realtor Cooperation Policy places a tight restriction on how properties can be marketed if they are not listed on MLS®. According to CREA, public marketing includes virtually any form of communication that reaches people outside of the listing brokerage. This includes:

  • Yard signs
  • Flyers
  • Digital ads (e.g., Google, Facebook)
  • Social media posts
  • Emails to potential buyers
  • Any online listings (including non-MLS® websites)

This means that the moment an agent uses any of these tactics, they are required to list the property on MLS® within three days. This severely restricts the flexibility that comes with exclusive listings, as public marketing is central to attracting potential buyers.

For agents and sellers who prefer an exclusive listing, the only way to keep the property off MLS® is to avoid any form of public marketing. If they want to stay within CREA’s guidelines, marketing is essentially limited to private, one-on-one communication with other agents or individual buyers.

Impact on Sellers and Agents

For many real estate agents, this policy feels like a substantial loss of control. Agents who have built their business around exclusive listings now face severe limitations on how they can market properties. The days of putting up a “For Sale” sign or posting on social media to build interest without using MLS® are effectively over.

Similarly, sellers lose the option to test the waters with a more targeted approach before committing to broader exposure. Sellers who choose an exclusive listing must now either forego public marketing entirely or prepare for the property to be placed on MLS® if they change their minds.

Potential Downsides of the Policy

  1. Reduced Marketing Options: Agents who prefer to create buzz through targeted digital ads, yard signs, or flyers will find themselves forced into using MLS®, whether or not it aligns with their strategy or their client’s wishes.
  2. Impact on High-Profile Sellers: High-profile clients who value discretion may feel uncomfortable with the idea of widespread public marketing, making exclusive listings less appealing under these new constraints.
  3. Less Strategic Flexibility: This policy removes the option to experiment with marketing tactics or create a sense of exclusivity. The mandatory MLS® listing, triggered by public marketing, may undermine strategies that rely on controlled exposure to a niche audience.

Does This Policy Serve the Market’s Best Interest?

While there’s no denying that MLS® has its benefits, this policy change has sparked debate over whether it truly serves the best interests of all parties involved.

The Pros:

  • Increased Access: MLS® allows more buyers to access listings, creating a fairer playing field. Properties listed on MLS® benefit from greater exposure, potentially leading to more competitive offers.
  • Consumer Protection: By enforcing cooperation and requiring properties to be listed on MLS®, the policy aims to protect consumers from being left in the dark about available properties, and their sold prices.
  • Transparency: The centralized system ensures transparency in property transactions, preventing hidden or off-market deals that could exclude certain buyers.

The Cons:

  • Restrictive for Agents and Sellers: For those who rely on exclusive listings, the policy feels like an unnecessary restriction. It limits autonomy and flexibility in how agents and sellers can approach marketing.
  • Not a “One-Size-Fits-All” Solution: The policy may work for the majority, but high-profile sellers or those who prefer a more strategic, private sale may feel that their needs are overlooked.

Is This Policy “Communistic”?

For some, the REALTOR® Cooperation Policy feels like a form of centralized control over the marketplace. By mandating that listings be placed on MLS® once public marketing begins, CREA is effectively taking away the ability for agents and sellers to manage their own marketing strategies. This approach has led some to compare the policy to a “communist” model, where central authorities dictate how business is conducted, limiting individual freedoms.

While that comparison may seem extreme, it’s easy to see why the policy might feel overly restrictive. In an industry built on competition, negotiation, and strategy, the idea of being forced into a particular system can be frustrating for agents who thrive on flexibility and creative problem-solving.

CREA: Not a Government Organization

The situation becomes all the more complex when you remember that the Canadian Real Estate Association is not a government organization; its a trade association. In Canada, Real Estate is governed by the province. Ontario’s Real Estate Council of Ontario (RECO) governs and oversees the trading of Real Estate. This begs the question: Why should a marketing board, created by and for REALTORS, restrict or prohibit how someone can market their property?

In order to be part of a MLS® or Real Estate Board, the agent must also join CREA & be bound by their policies. To advertise a property exclusively, the agent would have to not be a part of organized real estate.

Navigating the Policy: Alternatives and Solutions

So, how can real estate professionals adapt to these changes while still providing value to their clients?

  1. Private Marketing: Agents can still engage in one-on-one communication with other agents or individual buyers without triggering the MLS® requirement. While this limits broader marketing tactics, it does allow for more discreet marketing methods.
  2. Transparent Communication with Sellers: It’s crucial for agents to clearly explain the pros and cons of exclusive listings versus MLS® listings. By ensuring that sellers fully understand the limitations imposed by the new policy, agents can help clients make informed decisions.
  3. Adjusting Marketing Strategies: For agents who previously relied on public marketing to build interest in exclusive listings, it may be time to adjust strategies to comply with the policy. Focusing on creating relationships with individual buyers or real estate investors can help generate leads without resorting to public marketing.

Conclusion

The REALTOR® Cooperation Policy represents a significant shift in how agents can handle exclusive listings. While the policy aims to create a more transparent and fair marketplace, it also introduces restrictions that limit the flexibility and autonomy that many agents and sellers value.

Navigating these changes will require agents to rethink their marketing strategies and communicate openly with sellers about the potential trade-offs of exclusive listings in this new landscape. While the policy may not sit well with everyone, it’s essential to adapt and find new ways to succeed within the parameters CREA has set.

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