By Christopher Seepe

Kodak, Blockbuster, Northern Telecom, Sears, Pan Am, CREA – which one doesn’t belong? Well, if Canadian Organized Real Estate (CORE) doesn’t pull its head out of the sand, CREA, traditional monopolistic real boards and real estate brokerages of every size will join this prestigious list of organizations that were once at the top of their game and were all toppled by technology-savvy companies that made it their mission, successfully, to be social and business “disruptors”.

Phil Soper’s recent column in REM, In 5 years, you won’t recognize this industry, had a compelling title. I spent 35 years in information technology before entering real estate about 10 years ago. I found one absolute constant in I.T. – change. I’m absolutely certain that the Realtor we know today will not exist 10 years from now.



Unfortunately, Mr. Soper’s article smacked of the same protectionist-isolationist mindset of the senior management of all the companies I first mentioned who ultimately underestimated the consumer. His comparison of realtor.ca versus Zillow and the American versus Canadian ways of doing things is a red herring.

No number of Luddites will ever stop consumers from embracing the easiest-to-use, most information-robust and lowest-cost (especially free, advertising-driven) products and services. It’s the human condition. And politicians will change laws to cater to their consumer voters.

Companies like Zillow are redefining what it is to be a Realtor, just as hoteliers learned from AirBnB and taxi drivers from Uber. Telling Realtors not to figure out a business relationship with the Zillows is like asking consumer keyboard typists to ignore accurate voice recognition technology. Millennials are the Realtor’s clients of today and the next decade. They are so technology driven they text each other on their phones when they are literally sitting next to each other.

The various MLS systems serve arguably 110,000 Canadian Realtors. Realtor.ca is public and it aspires to be national but it’s light years from providing the breadth of choices and the depth of information that consumers demand today.

A system like Zillow will reach tens, and potentially, hundreds of millions of eyeballs. Which system do you think sellers want? Buyers will go to look where the sellers are “advertising” their listed properties.

I agree that Zillow should not receive for free the right to advertise a Realtor’s hard-won property listing. But to say that the MLS, non-integrated national brand proprietary listings services, and especially realtor.ca is the way to go, is like saying don’t worry about digital cameras; film is still better. Realtor.ca and every other Canadian MLS system I’ve seen are all built on 20-to-30-year-old technology with brutal navigation systems, unfindable information portals and display interfaces that would bankrupt any organization that actually had to compete for business.

CREA and the boards should get out of providing the MLS technology infrastructure and service. They’re collectively no good at it and they’re holding the whole Canadian real estate industry back. But they shouldn’t give up control of MLS and realtor.ca. They should properly monetize them and maximize their potential. How?

Embrace innovative and world-class technology partners by licensing the MLS and realtor.ca brands in an intellectual property policing role like entertainment companies do in developing and expanding their franchise universes (eg. Marvel, Lucasfilm). CORE should take a commission (royalty) from each use, that is, every viewed advertisement. Let the technology companies build competing MLS platforms if they wish but CORE takes a piece of every transaction. The consumers will win big-time from the competition. So will Realtors and CORE institutions.

CORE shares a piece of that royalty with their Realtor members as encouragement to list on these open MLS systems. Realtor listings will be exposed to a vastly larger audience. Perhaps successful transactions earn a larger commission. The massive increase in CORE revenues can be channeled to raising the bar of Realtor professionalism, vastly increasing charity contributions and effecting more powerful government lobbying.

Google built a $10-billion company within its first 10 years by providing free information. Ninety-nine per cent of that income came from advertising revenue. To Mr. Soper’s point, Zillow is repeating that success with a similar strategy and plan. Tens of thousands of advertisers will pay to advertise through one or more open MLS systems (controlled, but not managed, by CREA and its partners) to local, national and international communities.

Imagine the benefits to Realtors; maybe an MLS built on Google’s world-class search engine with its incredibly effective AdSense technology, integrated phone and camera systems, integrated Bing and Google maps with 3D buildings, integration with public municipal land-use systems (such as zoning), highly personalized and targeted “pushed” listing emails to likely buyer prospects, world-wide interconnectivity, maybe integrated municipal and land registry geographic information system layers – the options are beyond imagination.

So, who do you think is really holding you back and potentially obsoleting your profession as a trusted advisor to real estate buyers and sellers?

14 COMMENTS

  1. Can’t compare Zillow to Google for one simple reason: Google offers its own product. They started with a user-friendly powerful search engine, then added a free web-based e-mail and those products propelled them to the top.

    Zillow does not offer product: it displays listings that are already offered through realtor.ca and a number of other copycats with some additional data of questionable quality (Zillow does not guarantee accuracy of any data displayed on its website).

    Local consumers have habits. Many companies tried and failed to break those habits: Rogers owned Zoocasa; The Red Pin… Listings.ca seems to be offline too now. Is Zolo anywhere close to Top 3 Brokerages in Canada? Didn’t think so. This is in addition to hundreds of individually owned lead generating websites.

    With the conversion rate of 1.5%-2%, Realtors who pay Zillow to be displayed as “local experts” will quickly realize that their money is not taking them very far. Add the fact that each lead may be sold to more than one “expert” and divide that conversion rate accordingly. So if a lead is window-shopping in Mississauga, Oakville and Milton, it will be sold to a number of “experts” and two out of three of them will have eventually wasted their money. And if this lead was just gathering information before calling their Realtor-cousin or Realtor-uncle, all three of our “experts” just gave free money to a large american corporation.

    Of course, with 50,000 registrants on TREB alone, it will take time for everyone to realize that they are better off door knocking but the word will spread eventually.

    For most consumers out there, the “local expert” is not the random smiling face on Zillow’s website but the Realtor who has had the most “Sold” signs in their neighborhood, someone who supports local charity and who can be seen and heard at the local events and gatherings.

    Zillow is not even here and we are talking about it. It’s all hype and no substance.

    There will be a buyer for every product even if there is no product at all (how many people gave their money to Bernie Madoff?). AirBnB did not take Four Seasons Hotel out of business much like TTC does not affect Mercedes Benz sales. As a matter of fact, MB is selling more cars than ever despite the myriad of more affordable alternatives.

    For those considering paying to put their face on this american company’s website, Friday’s Lotto Max jackpot is $35 Million. You may enjoy a better return on your investment and the money you paid would stay in Canada.

    Happy Selling!

  2. The 3 opinions (and reply/comments) we have seen on REM (Thanks REM) show us how unprepared we (Organized Real Estate in Canada) are for Zillow. Every member “buying leads at $x per month” from a follow-up/Ad/SEO company now will be candidates for 25-50%-referral on Zillow leads. These leads will be gleaned from YOUR listing placed by you?/by your Association? on Zillow’s site). Do you want to become 25% partners w Zillow? Do you want your Association feeding YOUR listing to a site that will strip some/all of the buyer/seller inquiries and feed them to a competitor… who will pay Zillow a referral % to sell your listing? Well ….I guess it IS one way to avoid “Multiple Representation” :)

  3. I think Chris Seepe is absolutely correct. Realtor.ca should be the portal for every real estate consumer in Canada but it isn’t ! It isn’t because we allow CREA to distribute our data (for free) to 3rd party sites like Point 2 and Kijiji who make money off our listings, none of which accrues back to realtors. The other reason realtor.ca will not remain the major site for consumers is because it lacks the search capabilities and overlays that are demanded by the public and are inherent to a Zillow or Google platform. In my opinion, CREA has about 6 months to make realtor.ca what it should be or companies like Zillow will take over the market. This is not exaggeration, this is reality. If you don’t accept this then ask a taxi driver what their ‘tag’ is now worth after Uber (and others) hit the streets or a hotel owner what their occupancy rates are in the face of Airbnb.

    • Hi Bob

      “search capabilities and overlays that are demanded by the public and are inherent to a Zillow or Google platform”

      What search capabilities and overlays should CREA be implementing? This is a good forum to present your ideas.

      Thanks.

        • Yes those are good examples, however I think most buyers have already searched the areas they are looking to move into and have done their homework. If I were to put myself into the clients shoes, I would want

          Average sale price for the areas, and we know average sale prices don’t reflect accurate value but it gives the consumer a market to work with.
          Also I would want to be able to navigate the property search as easily as possible
          Realtor.ca should have more flair and colour and interactive links that give the info you mentioned above.

          It’s wonderful and great the way it is, just needs some flair.

  4. Zillow will figure it out. If they have to open a small brokerage in every board they want in every province to get the data feeds, they’ll do it. Check out their R&D spend for last quarter, $95 million USD! CREA can’t compete with that. Agents will fight for the leads and spend tons of money to get them. Agents will spend the money to make money. If they don’t, another agent will.

    Tech is changing the game big time. Fees and Services are going to come more and more under pressure. It will be a survival of the fittest(or fattest wallet).

    The key will be working with these technologies instead of shunning them.

  5. Zillow makes it money selling positioning. Agents can buy a zip code or two and have their smiling face show up as the agent for the area on all the shared listings advertised on the MLS feeds and from private sources. Buy this from me and save $5,000 is another lure that their agents can use to get clicks on other agents and brokers properties. REALTOR.ca is about the properties. Members cannot buy their way to the top of the heap and 3rd parties are not making money selling advertising and placement.

  6. This is absolutely laughable. So you’re telling me that Zillow should replace a system that we already have in place called realtor.ca, that is exactly the same thing. And we should pay for it. It’s incredible to me that realtors are always looking for the next best thing and wasting money , it’s Zillow is nothing more than realtor.ca get it through your heads. This is effective in America because not all agents are on realtor.com, however in Canada we are obliged to be members of the Canadian real estate Association there for all of our listings go on realtor.ca.

  7. I think you are blowing things way out of proportion. It makes me question your motivation for writing this article.

    Realtor.ca is the “ Google “ search engine for homes search across Canada. It is easy to navigate, your get precise accurate information on all MLS listings, it’s free and it is not a 3rd party company trying to make money from people, by reposting listings that are already available to the public on realtor.ca

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