Federal investigation on inflated commissions expands to Greater Vancouver Realtors | Daily Hive

Greater Vancouver Realtors

Canada’s competition regulator has widened a long-running investigation into how real estate agents are paid, securing a court order to collect records from Greater Vancouver Realtors (GVR) as it examines whether commission rules are hurting competition.

The federal government’s Competition Bureau announced today it has obtained a court order to gather information from GVR and advance its ongoing investigation into real estate commission rules in Canada, shifting the spotlight from national policies to how those rules are enforced in a large area of the South Coast of British Columbia.

The organization, formerly known as the Real Estate Board of Greater Vancouver, represents more than 15,000 real estate professionals and is one of CREA’s largest member real estate boards.

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The real estate board’s jurisdiction spans the select Metro Vancouver areas of Vancouver, Burnaby, Coquitlam, Port Coquitlam, Port Moody, New Westminster, North Vancouver, West Vancouver, Richmond, South Delta, Maple Ridge, Pitt Meadows, and Bowen Island, as well as the Sunshine Coast, Squamish, and Whistler.

The case first began in 2024 with a focus on the Canadian Real Estate Association (CREA), which sets standards for Multiple Listing Service (MLS) systems across the country. Those systems govern how listings appear and how compensation is communicated. Under the current framework, the seller’s agent must offer compensation to the buyer’s agent when a property is posted to MLS.

Regulators are now zeroing in on the Metro Vancouver market. The bureau says it is examining whether the rules used by both CREA and the regional board “may contravene the abuse of dominance or other civil provisions of the Competition Act,” and whether local enforcement changes how realtors compete.

In a bulletin, the bureau said it needs more information to determine whether the rules “discourage buyers’ agents from competing by offering lower commission rates or alternative pricing models; encourage ‘steering’, a practice where agents are motivated to steer buyers toward homes that offer higher commissions; [and] affect competition in other ways, which could result in higher costs for both buyers and sellers.”

While commission rates can vary by agent and brokerage, a commonly used structure in GVR is a total commission of seven per cent on the first $100,000 of a home’s sale price and 2.5 per cent on the remaining balance, with that amount typically shared between the buyer’s and seller’s agents. Brokerages also usually retain a portion of the commission before it is paid out to the agents.

CREA, a national trade association for agents and boards, establishes the rules that local boards follow to run MLS systems, including how commission offers must be disclosed. Membership in a local board, such as GVR, also means membership in CREA and adherence to those national rules. CREA represents over 160,000 members across the country.

Bureau officials emphasized that the case is still at the evidence-gathering stage. The bureau states the investigation is ongoing, and there is “no conclusion of wrongdoing at this time.”

When asked to comment on today’s court order, GVR offered the following statement to Daily Hive Urbanized from its CEO, Jeff King: “GVR takes its competition law obligations seriously and is fully cooperating with the Bureau. We are committed as an organization to following the letter of our legal and regulatory obligations and to demonstrating that our practices and business operations reflect this commitment over time.”

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