"Mere Posting" Scam....or not?

 

In order to determine if a "Mere Posting" in the context of selling Real Estate in Canada is a scam, let's first define the word "Scam".   According to Merriam-Webster's Learner's  dictionary here is the definition.

¹scam/ˈskæm/noun

plural scams

[count] : a dishonest way to make money by deceiving people
▪ She was the victim of an insurance scam.▪ a sophisticated credit card scam▪ a scam artist

 

So according to that definition someone who promises a "sale" of Real Estate or a "better" way to sell or a "cheaper" way to sell who won't in fact help facilitate a sale is a deceiving and may be a "scam".

I believe that money up front, before a sale contract is finalized provides little service or no service value for money. 

In a commissioned sale model the client only pays once they are happy with the result, which in my opinion best serves the client.

Now in order to see how a posting is just one part of the sales process, then you need to understand how the Canadian MLS® System works, who operates it, who can see the information and why.

First of all the biggest myth that is out there is that Realtor.ca is the MLS®.  This is not the case, even though CREA ® originally named the site mls.ca. 

Realtor.ca is a site that advertises MLS® Listings from each local Real Estate Board.  Realtor's do not search this site for their clients.  It is strictly a posting site, the same way remax.ca is for Re/Max® affiliates and how my website is for my listings and other local Realtor's I have data sharing agreements with.   It is true every Realtor® in Canada can choose the option of displaying their listing on Realtor.ca, but many listings may be on MLS® but not Realtor.ca.

Realtor.ca is run by CREA® nationally and CREA® owns the trademark MLS® and licenses it out to each real estate boards in Canada, and Canadian Member's of CREA®.  CREA® doesn't operate the MLS® system, each local board and the members of that board own and operate the system that individually feeds Realtor.ca. 

So in Toronto, TREB® (Toronto Real Estate Board) runs the MLS® system called TorontoMLS®.  In Ottawa it's Ottawa's Real Estate Board, in Muskoka it's Muskoka's Real Estate Board, in Edmonton it's Edmonton's Real Estate Board, etc etc , throughout Canada.

As a member of TREB® I can't browse listings on Ottawa's board, and they can't browse Toronto's.  The boards are not connected.  They can only see the listings on my board that are in their area as an "out of area" listing. So a Toronto listing can be on Ottawa's board, Ottawa Realtor's can see it, but no Realtor® in Toronto will see it on TorontoMLS®.  It is just simply not on their board.  If they can't see it, how can they help sell it? 

Now also Toronto is an open board, which means that if an Ottawa area Realtor® wants to take a Toronto listing they can, and for a fee of about $90 they can have it on our board so we can see it, but many Broker's can't be bothered to do it, or they do not want to pay the fee.  See they call Realtor.ca the MLS® (which it's not) charge a small fee up front and post it on Realtor.ca, but no Toronto Area Realtor® will see it, search it nor will it be emailed to their clients on the daily update.   This is a step that exposes your home to hundreds or thousands of qualified buyers looking for homes like yours and they choose not to tell you that this step is eliminated, which is very important. 

See their only concern is that $$ amount you are paying up front, after that you (as a home seller) are on your own, to spend more money on advertising, and your valuable time to take phone calls, book appointments, and if you might get an offer they don't even help with that, they tell you to take it to your lawyer.

Also, you need to know why the MLS® works to sell homes and there is 3 main parts to it:

1. Co-operation between the Seller, the Seller's Realtor, the Buyer's Realtor and/or the Buyer.  Each of these people involved must be willing to co-operate with each other on many levels, not just money, and if one party chooses not to, it makes the sale very difficult and the majority of the time impossible.

2. Real Estate is still very local, yes...even with the internet.  It's better to be listed on a local board so more people will see it. It stands to reason, buyers want to use the knowledge of a local Realtor. They know about taxes, upcoming by-law changes, zoning changes, termite areas, areas infected by pine beetles, etc.  Seller's should also depend on the knowledge of a local Realtor, if they don't then that makes the sales process more difficult and puts the Seller in a disadvantage in the negotiation by giving away more information than they should.

3. Correctness of the DATA.  Realtor's are responsible and liable for the information they put on the local MLS® system. Realtor's are supposed to view the homes the list, take measurements, and check taxes, survey's etc. If they choose to not do so, they are potentially exposing the seller to future law suits and litigation from a buyer, and also exposing themselves to litigation as well.  If the Data is incorrect on the MLS® or is not there altogether it diminishes the chance of a sale.

 

Using a commissioned based sales model removes or shifts most of the RISK from the Seller to the REALTOR.  A commissioned sales person or broker, only receives money once an offer has been agreed to by the seller, and only after closing. i.e.: the seller has their money.  If this does not happen the Realtor has lost money for time spent and advertising costs.  If this doesn't happen the Seller gets to keep the home, without spending a dime.  In a fee up front model, the Seller spends money for each individual service without a guarantee of a sale, and is this pre-paid method wise with such a unproven and questionably reliable method selling.

So in my opinion a "mere posting" is a deceitful, because those who want you to use it, say it's an "innovative way to sell" or "sell for less" or "you only pay this $ vs. this %"  but this sales model is unproven, the listings either get terminated or expire and the seller's are misinformed about how the MLS works and who operates it.  This service model only serves one purpose, and that is to enrich the one offering the service for very little work involved with no results.

One more point I would like to make:

I have been selling Real Estate in Toronto and the GTA since 2002.

Since I have been selling Real Estate in 2002 and have sold 100's of homes and those homes have been on Realtor.ca for exposure, absolutely NONE of the buyers that have contacted me from Realtor.ca have bought the home they contacted me about. NONE.  These listings have had 10's of thousands of views, and 100 emails or so, but I have not sold one of my listings via Realtor.ca.  All my listings that have sold have been sold by co-operating, from Open Houses, from my marketing channels and most importantly my data-base of 10,000+ people and my also my professional networking.

This is what enforces my belief that "mere postings" are on the most part deceitful or at best misleading.  They miss several key steps that lead to sales results.

I must make it clear though..."mere postings" are NOT illegal, and the Competition Bureau of Canada thinks that paying up front for no result is "innovative".   

Are they are not a "fraud" unless they took your money and didn't even post your listing.

If "mere postings" actually led to the sale of a home and not just a post to Realtor.ca then they would take the money AFTER a sale was made, but no they want it up front and leave you to fend for yourself.

So maybe before you pay up front, tell them to take that same $$ value they want, but as a commission after a sale is made.  If they don't agree, maybe you need to think again.

One last thing.

If home seller's all over the world originally wanted to pay Real Estate Agents up front instead of commission results based system, I'm pretty sure Agents would have been taking money up front for little or no work for decades.  This commission based system came to be, because seller's ONLY WANT TO PAY FOR RESULTS, it is not a system which has been forced upon the public by the Professional Real Estate Sales Industry.

Is a "mere posting" a "SCAM"?  I leave that up to you to decide......but if you want a "mere posting" that's up to you, I don't do it, because I believe that I should only be paid for results and I hate to see good people waste hard earned money.

 

Thank-you.

Brian Matthews

Sales Representative

Re/Max West Realty Inc., Brokerage

*The views above are those of Brian Matthews alone and not of any other party. The views are for informational purposes only and if these views can be disproven then Brian would like to see the evidence of consistent sales success using the hands off mere-posting model.*

** Commission can be either a flat fee or as a percentage of the sale price.