By Neil Sharma
The issue of permitting virtual office websites (VOWs) to publicly display sold data – a property’s purchase history – is still before the courts, a years-long litigation between the Toronto Real Estate Board, CREA and the federal competition bureau. But with finality possibly in sight, just what would VOWs do with the disputed data that TREB argues would compromise privacy if made public?
Canada’s largest real estate board believes publicly displaying sold data impinges upon customers’ right to privacy, although its sales agents are authorized to share it member-to-member and with clients in person, by fax or email. Yet, some VOW operators contend it is in consumers’ best interest to have as much information as they can to make informed purchasing decisions.
Realosophy is a Toronto-based VOW that aggregates copious quantities of information about properties and neighbourhoods to help customers choose their next homes. Not surprisingly, Realosophy’s president and founder, John Pasalis, believes sharing sold data with clients can make their purchasing decisions even more discerning.
The brokerage’s desire to display the sold data, “(Is) rooted in this idea that the more information consumers have at their fingertips, the better decisions they can make,” says Pasalis. “Philosophically, our view is quite different than TREB’s. TREB wants agents to be gatekeepers of data and our experience is when we give clients access to sold data they make more intelligent decisions on their own. They end up being more informed consumers and that’s consistent with what other industries are doing today – giving more people information at their fingertips.”
Realosophy would incorporate sold data into its aggregation packages for clients and Pasalis dismisses TREB’s claim that privacy will be jeopardized, calling it a smokescreen. He says empowering consumers so they’re not at the mercy of Realtors will force the latter to prove they are worth their salt.
“Publicly, TREB’s concern is privacy but if you look at the industry, the concern is the more information you give consumers, the tougher it is to be an agent,” he says. “It’s easier to build a career as an agent if you are a gatekeeper for data. All of a sudden you get rid of that and it becomes a lot harder to demonstrate your value to the consumer.”
Pasalis cited litigation south of the border in which the Department of Justice’s Antitrust Division sued the National Association of Realtors for anti-competitive practices that targeted Internet-based companies that, among other things, offered lower commissions. Similarly, Realosophy offers commissions up to a full per cent lower than the common 2.5 per cent charged industry-wide.
“TREB’s not taking that position because it is not a legal argument, but that’s the other underlying industry concern, which is consistent with what we saw in the U.S. when the National Association of Realtors was sued by the Department of Justice. In those records, there’s fear of new interests coming in and putting downward pressure on commissions. I don’t think TREB are champions of privacy by any stretch.
“But this goes hand-in-hand with what I said earlier: If you’re not doing anything of value then of course there will be downward pressure on your commissions. If we, as an industry, change what we do and reinvent how we work and demonstrate more value, those agents won’t have any issues.”
In his experience, clients find ways around the sold data prohibition and while it would be made available online should the Competition Bureau ultimately win its litigation, companies like Realosophy would nevertheless incorporate it into larger data packages.
“Part of it is putting it online and the other component is, internally, we analyze it,” says Pasalis. “The real estate market is complicated. For example, we’ll make in-depth Beaches and Rexdale comparisons. Progressive companies will use data to tell better stories about neighbourhoods, homes and condos.”
Another issue, says Pasalis, is that properties are often re-listed, which isn’t immediately obvious. “It isn’t just sold data, it’s other things like expired or terminated listings,” he says. “At the home level you can understand if this home is sitting on the market for 100 days and agents keep relisting it so it looks like it’s been on the market for two weeks; you can find out if it was flipped, what they bought it for nine months ago and what the appreciation they’re asking for now is.”
Nova Scotia-based Viewpoint Realty, a brokerage that operates a VOW, is extremely popular and offers clients sold data. ViewPoint.ca was visited 7.1 million times in 2016 and has 260,000 registered users, of which 120,000 were active in 2016.
Viewpoint cannot operate in the Greater Toronto Area because of the sold data prohibition, but its founder and CEO, Bill McMullin, a practicing Realtor, says consumers have made their voices heard in Eastern Canada.
“ViewPoint is not in the business of deciding what information each real estate consumer is entitled to – that’s the old way of doing business,” says McMullin. “If you offer consumers a choice of direct or mediated access to real estate information, they’ll choose direct every time. GTA real estate consumers are no different than Nova Scotia real estate consumers; if we were able to offer GTA real estate consumers the same experience that Nova Scotia real estate consumers get, I’m certain we would have a very successful brokerage in the GTA.”
McMullin adds, “Our sales history feature is the primary factor in our success.”
Like Realosophy, TheRedPin offers clients comprehensive data packages. It studies the cost impacts of everything from living on corner lots or being in close proximity to a WalMart, to being near arterial transit nodes or planned LRTs – even which storeys or condominium views sell better and faster. Perhaps unsurprisingly, then, TheRedPin is bracing for the liberation of sold data.
“Having a new set of data will allow me to take on more traffic, which means I can now go out and publicize or let consumers and the public know this data in its new form – the way we’re going to spin it, real data taken and formulated in a way that will make sense to people rather than the graphs and pie charts of the past – is available, and it will allow us to have a new consumer base,” says Tarik Gidamy, co-founder and director of TheRedPin.
“New customers are extremely important to any business. It will allow my agents to go out and do better work. I can formulate better assessments of property values so they can go to meetings with prices that are not based on opinion, but on actual numbers. It will also make homeowners more realistic of what their homes are worth.”
TheRedPin has more than 100 sales agents under its banner and has brokered over $1.5 billion in real estate transactions to date. But it is more than a mere brokerage; Gidamy describes it as a technology company at heart that enables customers to optimize the results of their imminent real estate transactions.
Such an approach to real estate could conceivably inform the wisdom (or lack thereof) of purchasing investment properties, whether residential or commercial – which Gidamy says is just one of the ways in which the industry is evolving.
He believes technology has created better understanding of the real estate market in ways agents, who are prone to human error, cannot. Comparing TheRedPin to Uber’s silent, yet empowering, hand, he is loathed to use the word “disruption,” but says the time has never been better for a shakeup of the industry.
“Because of technology, we understand the business and intelligence of real estate,” he says. “You can’t predict the future without looking at the past in real estate because the industry itself is cyclical. Trends and historical values are relative to what happened before and new things emerging today like what a house is worth if situated next to a Starbucks, big box store or the Eglinton LRT matter.”
Whatever the final outcome of the litigation, the sole surety is that the traditional foundation of the real estate industry has been jolted beyond repair – and whether or not sold data availability is, indeed, the Toronto market’s next transfiguration, technology has rendered the real estate industry of yesteryear unrecognizable from today’s or tomorrow’s.