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The Canadian Real Estate Association’s new Realtor Cooperation Policy aims to curb the widespread use of ‘exclusive listing’ and ‘coming soon’ tactics.
Effective January 1, 2023, this policy mandates that all publicly marketed property listings must be added to the Multiple Listing Service (MLS) within three days.
Real estate boards and associations across Canada have a six-month window to implement and enforce these crucial new rules within their respective MLS systems.

CREA’s New Policy: Boosting Transparency and Cooperation in Canadian Real Estate

The Canadian Real Estate Association (CREA) is ushering in a new era of transparency and fairness within the real estate industry with the introduction of its Realtor Cooperation Policy. Set to take effect on January 1, 2023, this significant policy aims to put an end to perceived abuses associated with “coming soon” and “exclusive listing” practices, thereby reinforcing the foundational principles of cooperation and integrity that underpin the nation’s real estate market.

This landmark policy mandates that realtors must list properties on their respective board or association’s Multiple Listing Service (MLS) system within three days of any public marketing efforts. This requirement ensures broader exposure for properties, fostering a more equitable playing field for both buyers and sellers, and strengthening the collective value of the MLS system across the country.

Addressing the Core Problem: Misuse of “Coming Soon” and “Exclusive Listings”

For years, the use of “coming soon” and “exclusive listings” tactics has been a contentious issue within the real estate sector. While intended in some cases to offer privacy or a controlled marketing approach, these methods have increasingly been exploited, particularly during periods of intense market activity with low inventory. Properties would often be marketed discreetly, or as “coming soon,” only to be sold before ever reaching the full public exposure of the MLS system or Realtor.ca. This practice has significant negative implications:

For Buyers: It limits their access to available properties, reduces choice, and creates an unequal playing field where only a select few are privy to opportunities. This can lead to frustration and the feeling of missing out on potential homes.
For Sellers: While some sellers might be convinced that an exclusive listing is advantageous, it inherently restricts the property’s exposure to the broadest possible pool of potential buyers. This can inadvertently lead to a lower sale price or less competitive offers than what might have been achieved through a widely marketed MLS listing.
For Market Integrity: The widespread use of these tactics undermines the transparency and efficiency that the MLS system is designed to provide, eroding public trust in the real estate profession.

Cliff Stevenson, immediate past chair of CREA, who spearheaded the consultation process with the realtor association community nationwide, highlighted the scale of the problem. “The challenge in these last two years of this heated market was the number of properties that never came to the MLS system or never came to Realtor.ca because they were sold out,” Stevenson observed. “We saw this as a problem and we saw a need for us to recommit to cooperation in our industry, which is one of the pillars of our industry.”

Defining “Public Marketing” and Policy Mechanics

A cornerstone of the new policy is a clear and comprehensive definition of “public marketing.” CREA specifies that public marketing encompasses any representation or promotion of a listing to the public or to any realtor not directly affiliated with the listing brokerage or office in a business capacity. This broad definition ensures that virtually all promotional activities trigger the three-day MLS listing requirement. Examples of public marketing include, but are not limited to:

Distribution of flyers or brochures.
Placement of yard signs.
Digital marketing on public-facing websites, including broker-owned sites.
Displays on brokerage office screens.
Posts or advertisements on social media platforms.
Email blasts to a wide audience.

The policy acknowledges that there are a few, very rare exceptions where a property may not be immediately placed on MLS. These typically pertain to situations involving highly sensitive personal circumstances or specific client instructions that genuinely warrant a one-to-one marketing approach rather than a broad, public one. However, as Stevenson clarified, “As soon as you move to a definition of one-to-many, you’re talking about a public marketing initiative, and it’s really anything that would be outward public marketing.” This distinction prevents the loophole of private, one-to-one discussions from being misused as a prolonged ‘exclusive’ marketing strategy.

The Indispensable Value of the MLS System and “Network Effects”

CREA’s proactive stance on this issue is strongly supported by recent findings. An independent research study commissioned by CREA underscored the profound value and effectiveness of Canada’s MLS systems for realtors, home sellers, and buyers alike. This report particularly emphasized the concept of “network effects” as a primary driver of this value.

Network effects describe an economic phenomenon where the value of a service or product increases as more people use it. In the context of real estate and the MLS, this means:

More Listings Attract More Buyers: A comprehensive database of available properties makes the MLS the go-to resource for prospective purchasers, ensuring maximum visibility for listings.
More Buyers Generate More Competitive Offers: A larger pool of interested buyers typically leads to more robust offers and potentially higher sale prices for sellers.
Enhanced Market Efficiency: The centralized nature of the MLS provides transparent, real-time data on available properties, past sales, and market trends, allowing realtors to offer informed advice and facilitating quicker, more efficient transactions.
Fairness and Access: It democratizes access to real estate information, preventing a select few from having an unfair advantage and ensuring all buyers have an equal opportunity to find a home.

Stevenson articulates this perfectly: “When somebody says ‘coming soon,’ they mean it’s coming soon to the MLS system, it’s coming soon to Realtor.ca.” The new policy directly reinforces these network effects, ensuring that the full power and benefits of the MLS system are consistently delivered to consumers, fostering an environment of trust and equity.

Industry Perspectives: Change, Challenges, and Support

As with any significant policy shift, the Realtor Cooperation Policy has generated diverse reactions within the real estate community. Alan Tennant, President and CEO of the Calgary Real Estate Board (CREB) and a member of the CREA working group that recommended the policy, succinctly stated, “It’s a tell. It’s not an ask. We have to be clear about that… It’s new, and there are some that think it’s exactly what’s been needed for a long time, and there are others that are quite unhappy about it. Change is not easy.” This sentiment captures the tension between those advocating for stronger regulation and those accustomed to existing practices.

Tennant also highlighted the operational aspects, noting that “real estate boards and associations have six months to adopt the rules, because we all have different processes, and commence enforcement.” This transition period acknowledges the need for local entities to integrate the new policy into their specific MLS system rules and operational procedures, ensuring a smooth, albeit challenging, rollout.

The ‘Double-Ending’ Dilemma and Consumer Protection

Sandra Kirkland, a seasoned Toronto-area broker and realtor, offered a candid perspective on why the policy is both understandable and necessary, despite potential industry discomfort. She recognizes that while some agents and brokers are “concerned and frustrated and upset,” many of these exclusive practices have been driven by motivations detrimental to consumer interests.

Kirkland explained that while there are “a couple of valid reasons” a seller might genuinely prefer not to list on MLS (such as extreme privacy concerns, unwillingness to accommodate frequent showings, or not wanting their sale price publicly posted), these are increasingly rare exceptions. More often, she notes, the reasons for exclusive listings lean towards “nefarious reasons,” primarily to allow the listing agent to “double-end” the deal.

Double-ending, where a single agent represents both the buyer and the seller in a transaction, can indeed lead to a reduced overall commission for the seller. However, it also introduces a significant conflict of interest. The agent’s fiduciary duty is split, potentially compromising their ability to negotiate the best terms and price for either party. As Kirkland emphasized, “this is progressively damaging to the integrity and the value of MLS and I think it diminishes the value of a realtor as well.” By restricting exclusive listings, the policy aims to mitigate such conflicts, ensuring that consumers receive unbiased representation and maximum market exposure.

Reinforcing Professionalism and Building Trust

Ultimately, CREA’s new policy seeks to achieve several critical objectives: reinforce cooperation among realtors, better serve the needs of consumers, strengthen its trademarks (such as Realtor.ca), and elevate professionalism across the industry. By requiring listings to be widely accessible, the policy promotes a competitive environment where agents must actively work to find the best outcomes for their clients, rather than relying on limited networks or private deals.

The transition period for boards and associations to adopt and enforce the policy means that adjustments will be required. Tennant acknowledged that “some business models, franchise groups, brokerages, and some agents, invested significant money in exercising an option that was not really governed.” However, the long-term benefits of a more transparent, ethical, and efficient market are expected to outweigh these short-term adjustments.

While some agents fear that sellers might be less inclined to hire a realtor if they are “forced” to go on MLS, Kirkland firmly disagrees with this sentiment. She believes that the value of a professional realtor lies not merely in having exclusive access to listings, but in their expertise, negotiation skills, marketing prowess, and ability to navigate complex transactions on behalf of their clients, regardless of listing platform. The policy, therefore, re-focuses the profession on these core competencies, ensuring that the Canadian real estate market remains a fair and trusted environment for all participants.