Last week the Supreme Court of Canada ruled that it will not hear TREB’s (Toronto Real Estate Board) case to keep the sale prices and historical sale prices of sold homes private. This has been an ongoing battle between The Competition Bureau of Canada and TREB and the public will now be able to access sold data of homes with relative ease.
Before you continue reading, I feel it is important to let you know that my opinions are completely my own and while I am a real estate agent, they are 100% unbiased. I am for a free market and technological advances which can benefit consumers. Whether it is my industry or any other industry, I believe there is always room for growth and true professionals will always be able to adapt and serve their consumers to the highest level.
What Was All the Fuss About?
The Competition Bureau argued that TREB should be releasing sales data to the public. TREB argued that the information was collected and paid for by its members, and therefore should not be forced to give away the information that its collective members have paid and worked to create.
On the surface, TREB’s argument is valid. The more than 45,000 Real Estate Agents who belong to TREB pay annual dues and have a system which allows its members to search sold statistics to assist agents in creating market evaluations for homes and provide this information to prospective clients.
Where TREB is wrong, is that they SHOULD NOT be able to dictate how it’s paying members use and share the data they have access to. If an agent would like to provide sold data on their website, they should have the freedom to do so. In that sense, I believe TREB is being anti-competitive in not letting every business model flourish.
What Does This Mean For Home Buyers?
The access to data overall should be seen as a benefit to buyers. There are definitely going to be pros and cons to this change and I will share my thoughts to both:
Pros
- You have access to all sales data, ensuring you are seeing the full picture of the market
- You can access this data on your time and not wait for an agent to respond to your requests
- You will have more insight into the market and can educate yourself without having to be working with an agent
Cons
- Majority of the websites offering this information will have generalized information. Knowing the average sales price in an area does not paint an accurate representation of the market by house type and specific features
- Agents will begin removing pictures of homes they sell from the IDX and VOW feeds. This will limit buyers to knowing what every home that sold actually looks like and will make it harder for consumers (and agents)
How will your relationship with a real estate agent change? Very little will change here.
An analogy I like to use is that you can go to a local Chapters and buy a cookbook written by a world-renowned chef. The cookbook will provide detailed step by step instructions on how to create the perfect dish, but even with the information at your fingertips, you will still fall short of a 5-star Michelin entrée. Real Estate agents will still be vital in interpreting data and taking the Macro into a Micro and explaining the market to consumers in an easy to understand, tangible method.
This will no doubt create a lot of new business models with a more “do it yourself” approach. There are definitely consumers who can benefit from this, but there are also those (in more cases than not) who will think they know all there is to know about the market and put themselves in vulnerable situations.
I believe this will ultimately create changes within how TREB’s active members and brokerages operate. There will no doubt be an increase in consumer claims for negligence and false and misleading representation under new business models and currently, all members are under the same insurance coverage for errors and omissions.
There will be a lot of push back by traditional brokerage and full-service models who are actively engaged in the consumers best interests. This can be done through breaking up the existing structure, or adding in new forms where consumers electing to go with a specific brokerage or service provider, will need to acknowledge and accept more liability under a “do it yourself” style service.
Truthfully, a consumer cannot be crying wolf if they are putting themselves in a position to get bit.
What Does This Mean For Home Sellers?
I’m undecided on whether or not this is a benefit to a home seller overall. I do believe that this change will create a lot more misinformation, or poor interpretation of information, which will have buyers being more adamant on a price that isn’t actually reflective of what your home is worth.
That being said, there are definitely some pros to go along with the cons:
Pros
- You will have access information as to what homes on their street and in their area are selling for and have an accurate idea of value
- You will not need to call a real estate agent to provide you with sales data or have them interpret that data for you until you are ready to
- If you want to sell privately, you will have more information and so will buyers, making the transaction a lot smoother
Cons
- Buyers will become “experts” and use general information to value your home. In most cases, this will be a lower number than your home is worth because the data they are accessing will be generalized
- It will remove some of the emotional connection that buyers have walking into your home. You can be seen as just another option to choose from, without a proper analysis of what your home provides over other sales
How will your relationship with a real estate agent change? It will become much more vital for home owners to select a real estate agent who is able to interpret data and market your home effectively to stand out in the market. There will be a thinning of the herd and the active count of agents on TREB will likely drop in half within the next three years.
What will become more important than ever is the value-added services real estate agents are providing. Things like home staging, Video Walkthroughs, Search Engine Optimization and high end in home visual marketing should be a mandatory requirement in selecting the agent to represent the sale of your home.
While you have the data on hand, real estate at its core is a face to face and personal business. Even though I have been a realtor for 10 years, I would still hire another agent to sell my house. It is far too emotional of a process and I would be too subjective and it would cloud my reality of the current market conditions… I would totally take negative feedback personally.
What Does This Mean For Real Estate Agents?
I think this will put up some walls between real estate agents. There is definitely a hard line drawn between where agents stand on this ruling.
There are the “old school” agents, many of whom are excellent agents but see this ruling as us giving away our information for nothing.
Then there are the “new age” tech savvy agents, who believe consumers should already have access to the data.
Whatever side of the fence real estate agents are on, on thing is for certain; True professionals do not want to see fly by night, data aggregate companies popping up. There are some great companies within the industry like condos.ca, who put good work and effort into providing quality information, but by and large, most of the companies providing this information will be tech companies, not active real estate agents.
I also believe this will create a further divide between the full service real estate agent and the discount business model. This divide is already a negative in our industry and this change will increase the already existing egos at play. I welcome all business models in our industry, but can confidently say there is definitely a difference in my interaction with agents who treat this business as a profession and operate with a high level of integrity and those who operate on a volume based or low cost business model. It is hard to opereate any business, and when you are operating with razor thin margins, service is the first thing to go.
My hope is that the true professionals (whatever their opinion) will continue working with one another and do what is in the best interests of our buyer and seller clients.
I have always been an advocate of creating the best customer experience possible and so I have always embraced technology within our industry. I see this as a great opportunity to enhance the consumer experience by providing more information upfront and assisting my clients in interpreting the data.
Really, it’s business as usual at The Tamburello Team and we are very much invested in our online home search platform for buyers (which by the way is pretty cutting edge). I hope you’ve enjoyed this article and if you have any questions you can always reach out to us at any time.