In the Winnipeg Real Estate Board’s latest attempt
to turn its vices into virtues, the boys and girls
who call themselves Winnipeg Realtors have
taken credit for bolstering our economy while removing
so much money from the rest of us.
A May article in its Winnipeg Real Estate News
attempted to make the case that it and its MLS were
important drivers of our economic well-being. Is this
realtor logic? It’s probably the same fuzzy reasoning
that has every agent claim she can net you more and
cover the cost of her commission. But economics and
reality have never been their strong suits.
The article quoted a study done by the commissioned
industry’s lobby group, the Canadian Real
Estate Association, saying the resale housing industry
generated more than 202,000 jobs and an average of
$22.3 billion annually in various economic spin-offs
in the period from 2006 to 2008.
That’s fine, but then it tried to credit the MLS by
implication with this benefit: “The report said each
residential MLS transaction generated an average
$46,000 in additional consumer spending during the
same period, including the purchase of furniture,
appliance, moving costs, renovations, services and
taxes.”
But it’s us who spends the money, and we have less
of it to spur the economy if we pay thousands in real
estate commission.
“The study showed that one in 85 full-time jobs
was generated directly and indirectly through the
purchase and sale of MLS homes,” the story stated.
Here’s the message the agents want you to get: The
MLS is an economic engine. Without it, we’d all be
poorer.
Here’s the reality: The agents and their MLS create
no value and drive nothing. Without it, only the
agents would be poorer. The value is in the homes
we sell.
LINDENWOOD DR. WEST, Linden Woods
List Price: $357,500
Sold For: $361,000
Saving in GST
& commission: $22,000
(6% comm./GST)
That value exists no matter how the home is
sold. All the MLS does is syphon some of that value
off into the agents’ pockets when a home is sold on
the MLS. They now decide how that money will be
spent, diminishing the amount each of us has at our
discretion to spend.
There would no more, or no fewer, houses sold if
the MLS didn’t exist because we, our needs and
desires, create the demand . . . and that demand
would be satisfied whether agents existed or not.
What is our cost of the MLS in this market? Last
year, the Winnipeg board’s agents took in more than
$110 million in commissions for the approximately
12,000 homes sold
If all of those homes had been sold on ComFree’s
market, it would have cost $8.4 million, more than
$100 million less.
We could then each of us decide how we would
want that $100 million to benefit the economy . . .
and ourselves.
Neither the MLS nor ComFree create wealth. Our
homes create this wealth. The question is merely who
gets to spend all the proceeds when they’re sold.
